Can I Avoid Taxes on $800k in Home Sale Gains When Downsizing for Retirement?

SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. When you sell a primary residence, the IRS allows you to exclude from your capital gains taxes the first $250,000 of profits if you file single or $500,000 of profits if you file jointly. You must include any surplus of those amounts in your taxable capital gains for the year, though. So, what if you sell your house for an $800,000 profit? You will probably owe taxes on a good portion of that sale, althoug ...