MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Don't Pay Capital Gains Tax on Your Home Sale #taxes #realestate

12 Sept 2026 · 1 min

Watch on YouTube

1:18

In this YouTube segment, Mark Kohler walks viewers through a concrete example of a married couple, Robert and his wife, who bought a home for $190,000, invested $20,000 in improvements (raising their tax basis to $210,000), and later sold the property for $390,000, realizing a $180,000 capital gain. Kohler explains how the U.S. primary residence exclusion works: married couples can exclude up to $500,000 of gain (singles up to $250,000) from taxable income, provided they lived in the home for at least two of the five years preceding the sale. He emphasizes that, because the couple meets the ownership and use tests, none of the $180,000 gain is subject to capital gains tax. The segment highlights the calculation of basis, the role of improvements, and the key eligibility criteria for the home‑sale tax exemption.

Chapters

Robert has a primary residence that he lived in with his wife. So it's husband and wife. They purchased it for $190 grand. And I have a feeling Robert did a little work on it. You know, I'm going to say, Robert, you probably put in $20 grand in improvements over the last 5 years. So they did improvements. And so his basis— and any of you out there can do the math— you want to look at your purchase price and then add to it any improvements. And he put in $20 grand in improvements. So now his basis is $210 grand. And then he and his wife sold it for $390 grand. What? Congratulations, that is awesome. So they sold— that's SP, sales price. This is so good. So we got to do our math here. $390 over $210, so that's $180,000 gain. So his question is, I've got to now pay tax on $180 grand because we have a new home. We went and bought a new home. So Mark, I don't want to pay tax on $180 grand. Here's the good news: no tax. There is no tax on that $180 grand. Everybody out there, if you live in your primary residence for at least 2 years, you do not pay tax if you're married on the first $500 grand. If you're single, you don't pay tax on the first $250 grand. It's called the sale of home exemption.