"If I wanted to sell it, how do I avoid capital gains tax."
You won't be able to avoid capital gains tax, but as VolvoGirl alluded to, you may qualify for a capital gains exclusion of $250,000 ($500,000 on a joint return) if you live in the house as your primary residence for at least 2 of the 5 years leading up to the date of sale.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
