Bottom line: Gain realized from the sale of real estate are flat out not deferrable. Period.any property improvements you do to your home just add to the cost basis of that home. However, that is not reported anywhere on your tax return until one of three things happens in your life.
1. You convert the property to a rental or some other type of business use.
2. You sell the property.
3. You die.
So until such time, all you do is file all paperwork related to the property improvements with the closing paperwork you got when you originally purchased/acquired the property. That way, you will have it when one of the above three things accurs, as you won't need it until then.
I did come across an article on nerdwallet.com
One has to be careful with information from 3rd party sites. Often, the information is outdated or just flat out wrong. IRS publication 523 at https://www.irs.gov/pub/irs-pdf/p523.pdf is the most current publication available that covers all the rules and exceptions for selling your home. It's important that you familiarize yourself with the "Eligibility Test" section starting on page 3 of that publication.
As for exclusion of capital gains, that's a completely different unrelated thing. If, when you sell the property, it was your primary residence for at least 730 days (2 years) of the last 1826 days (5 years) you owned it, counting back from the closing date of the sale, then a set amount of capital gains is excluded from taxation. A max of $250,000 if filing single, and a max of $500,000 if filing Married Filing Joint. There is also a provision for MFJ that if your spouse dies, you have a maximum of 2 years after their passing to sell the property and still get the full $500,000 exemption.
