When selling real estate, it is important to understand the potential tax burden as the IRS may be entitled to a share of your earnings. If you are selling your primary residence, you may be able to take advantage of the capital gains exclusion, allowing you to exclude some of your profits from taxable income. Depending on the amount of profits and filing status, the exclusion can be up to $500,000 for married couples filing jointly. Otherwise, capital gains tax may be due on the remaining profit and the rate is usually 15%. The cost basis includes not only the price paid for the home but also any money put into capital improvements. If
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