Hi Lisas275,
Congrats on the big move!
At this point, having already sold the house, there is nothing you can do to affect the amount of capital gains tax owed. Capital gains tax would be based on your amount of capital gain, above the exemption.
If you owned and lived in your house for at least two of the five years immediately preceding the sale, then you can exclude up to $250,000 of capital gain. If you're married filing jointly, you could each exclude $250,000 for a total exclusion of $500,000.
Your gain is calculated as your sales price, minus sales expenses (things like title costs, real estate commissions, etc.), minus your basis. Your basis is what you originally paid for the house, plus costs incurred over the years of ownership for improvements, and some of your original closing costs.
So, for example. Let's say you bought the house 20 years ago for $100,000 and paid $1,500 of closing costs. While you owned the house you spent $33,000 building an addition and remodeling the kitchen. Your basis would be $134,500. If you sold the house for $750,000, your capital gain would be $750,000 - $134,500 = $615,500. If you were married filing jointly, you could exclude $500,000 of that gain, so your taxable gain would be $115,500.
Any capital gains tax is due by the time you file your next tax return. If you sold your home in 2021, then you would file your tax return in early 2022. If you have a large capital gain, you should plan to make an estimated tax payment soon so you don't have a huge balance due on the return (and a possible underpayment penalty).
Your capital gains tax depends on your total amount of capital gain and total amount of other income. The gain would be taxed at either 0%, 15% or 20% depending on the amounts.
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