Hello. My wife and I are planning to sell our home. We estimate about $1 million in gains from the purchase price. We plan to file jointly as married. We have bought and been living in the home for ten years, and it has been our primary residence. Together, we make less than $70,000. Do we need to pay taxes on the house after the sale? We are in California.
Also, in case we need to pay taxes, can we deduct any permanent improvements? Specifically, I built a patio for the house, but during that time, my wife was the sole owner, and we were not married, and I acted as a contractor. Thank you.
