@Drew33820
There are some other adjustments to basis as listed in publication 523, but basically, if you sell something for more money than you originally invested, the difference is your taxable capital gain. You don’t get an adjustment for the value of your labor, and what you do with the gain after the sale has no effect on the tax you pay on the gain.
The tax advantage for owning a home is that the first $250,000 or $500,000 of gain is non-taxable when you sell your main home, but any other profit is taxable, as is the profit (gain) from the sale of rental property, business property, or a second or vacation home.
