Many home sellers are making a profit on their sale. But if that profit is high enough, they may be on the hook for capital gains taxes.

Capital gains taxes kick in when profits exceed $250,000 for single sellers or $500,000 for married couples who file together.

As home prices have soared, longtime homeowners may be more likely to see a tax bill.

Many rules affect the rate. For example, sellers must own and use the home as their primary residence for two of the five years preceding the sale, but those two years don’t have to be consecutive.

For example, home additions, patios, swimming pools, or other improvements may qualify for exclusions if they can be shown to add value. Homeowners will need to keep detailed records.

We would suggest borrowing on your equity before selling by obtaining an 'Equity Loan'. See what your bank or credit union rates terms and conditions are offered.

Source: “How to Sidestep a Tax Bomb When Selling Your Home,” CNBC (May 17, 2022)