Will I Qualify for a Tax Break After Downsizing and Netting $750k From My Home Sale?

Core Insights - The IRS taxes profits from home sales as capital gains, with rates depending on the duration of ownership [3] - Homeowners can calculate capital gains by subtracting the adjusted cost basis from the sale price, but taxes may not apply to the entire gain [5] Tax Calculation - Capital gains are calculated as total sale price minus the asset's cost basis, which can include improvements and certain transaction costs [4][7] - Repairs do not contribute to the adjusted basis, while significant improvements do [4] Capital Gains Exemption - Married couples can exclude up to $500,000 in profits from capital gains taxes, while individuals can exclude up to $250,000 [8] - This exclusion is known as the Section 121 exclusion, requiring ownership and primary residence use for at least two of the past five years [9]