Capital Gains Tax on the Sale of the House

There was a day not too long ago when people going through divorce could take on a big risk of exposure to the tax on capital gains. Now though, for any sale of your home after May 7, 1997, capital gains are unlikely to be a problem.

You can now exclude up to $250,000 of the gain on the sale of your house — $500,000 for a married couple. And you’ll be able to exclude that much again if you sell another house after another two years. You (or your divorced spouse pursuant to a divorce agreement or order) must have lived in the house for at least two of the last five years. You can read more about this on the page about taxes.

What all this means is that for the vast majority of us, capital gains on the sale of our house is just no longer an issue. Good.