If you sold your home in 2024 you could claim the maximum capital gains exclusions that were set in 1997. However, since these exclusions aren’t adjusted for inflation, so many long-time homeowners may still face capital gains taxes on their federal tax return

The maximum exclusion on homestead capital gains is $250,000 for single filers, and $500,000 for married couples. Sellers must have lived in and owned the home for at least two out of the past five years.

Subtracting the purchase price of the home from the sales price gives you the cost basis but you can minimize capital gains by including the cost of any capital improvements you made.  Capital Improvements are permanent structural changes and restorations that enhance the property’s overall value, its useful life, or adaptation to new uses.