CAPITAL GAINS IN REAL ESTATE

CAPITAL GAINS IN REAL ESTATE

If you’ve owned your home for a long time or have seen substantial appreciation, you might be wondering about capital gains taxes and how to reduce them when you sell.

Here’s what you need to know:

Long-Term Capital Gains Taxes
These taxes apply to the profit made when you sell real estate you’ve owned for more than one year. They are typically taxed at lower rates than short-term gains, which are treated like regular income.

What Counts as “Profit” in Real Estate?
Profit equals the sale price minus your cost basis. Your cost basis includes:

  • The purchase price of the property
  • Closing costs and sales expenses
  • Qualifying capital improvements or investments

How to Reduce Potential Capital Gains Taxes
You can reduce your taxable profit by increasing your cost basis through improvements that:

  • Increase the home’s value
  • Prolong its useful life
  • Adapt it to new uses

Examples of qualifying improvements may include:

  • A new roof
  • A new HVAC system
  • Replacing old windows with energy-efficient ones
  • Kitchen or bathroom upgrades

Capital Gains Tax Exemptions
If you’ve owned and used your home as your main residence for at least two of the last five years before selling, you can exclude up to $250,000 (single) or $500,000 (couple) of capital gains from taxes.

Always consult your accountant or tax attorney for personalized advice and accurate calculations.

If you want to discuss how capital gains might affect your real estate plans, I’m happy to help.  Reach out to Amie Pisano.

📧 Email: [email protected]
📞 Phone: 914-715-2632


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Whether you're looking for a new home or thinking about selling your current one, reach out today. I am dedicated to guiding you every step of the way to help you realize your real estate goals. Let me put my expertise to work for you.

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