Tax Tip #281

Ralph Loggia • January 6, 2026

Selling Your Primary Home

If you have owned and lived in your main residence for at least 2 out of the 5 years before the sale date, up to $250,000 of the gain (or $500,000 for joint filers) is tax free. 


Example: Married couple Deanna and Steve meet the requirements and are selling their home for $900,000, which they purchased for $250,000. Their taxable gain is $150,000 ($900K - $250K - $500K). The gain can be further decreased by closing costs and improvements. 


Examples of improvements: 

  • Landscaping 
  • Swimming pool 
  • Roof, doors, windows 
  • Insulation to attic, walls, floors 
  • Pipes & duct work 
  • Security system 
  • Lawn sprinkler system 
  • Fireplace 


Examples not considered improvements: 

  • Repairs or maintenance 
  • Painting 
  • Cost of any improvement with a life expectancy of less than 1 year 


Check with the IRS for more information about what is and is not considered an improvement. 


Need assistance in calculating your potential gain on the sale of your residence? Have unforeseen circumstances where you need to sell but do not meet the 2 out of 5 year test? Reach out to a member of our team for assistance.

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