Home Sale Net Proceeds & Capital Gains Calculator
Estimate your net cash proceeds at closing and federal capital gains tax when selling your home. Includes IRS Section 121 exclusions, agent fees, and cost basis adjustments.
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Calculation Methodology & Statutory Rules
Net Selling Proceeds = Sale Price minus closing costs and agent commissions (default ~8%).
Cost Basis = Original Purchase Price plus qualified capital improvements.
Realized Capital Gain = Net Selling Proceeds minus Cost Basis.
Under IRS Section 121, if you owned and lived in the home as a primary residence for at least 2 of the 5 years before sale, up to $250,000 (Single) or $500,000 (Married Joint) of capital gain is completely tax-free.
Taxable Gain above the exclusion is taxed at long-term capital gains rates (0%, 15%, or 20%) plus Net Investment Income Tax (3.8%) if income thresholds are met.
Frequently Asked Questions
Q1.What is the Section 121 primary residence exclusion?
IRC Section 121 allows single homeowners to exclude up to $250,000 and married couples filing jointly up to $500,000 of capital gains from federal income tax when selling a primary residence.
Q2.What qualifies as capital improvements to increase cost basis?
Capital improvements are permanent structural additions or major upgrades that add value or prolong the home's useful life (e.g. adding a room, new roof, HVAC system, kitchen remodel). General maintenance and repairs do not qualify.
Q3.What are the requirements for the 2-in-5-year rule?
You must have owned the property and lived in it as your primary main home for at least 24 months (730 days) during the 5-year period ending on the date of the sale.
Q4.What long-term capital gains tax rates apply in 2026?
Long-term capital gains on home sales above the Section 121 exclusion are taxed at 0%, 15%, or 20% depending on overall taxable income, plus an optional 3.8% Net Investment Income Tax (NIIT) for high earners.
Disclaimer: Results are estimates based on standard tax rules for the 2026 tax year and are provided for informational purposes only. Individual circumstances (deductions, credits, specific state/local rules) may significantly affect your actual tax liability. Always consult a qualified tax professional or accountant for advice specific to your situation.