What does a "capital gains asset" mean? If I sold my home in 2017, would the profit from that sale be considered a capital gains asset? Is that a subtraction adjustment?

[kerriP · Accepted solution]

You mentioned a sale which occured in 2016.   I am not sure if that is what you meant, but that tax return (2016) should have been filed last year.

Capital gains  are the profits realized from the sale of capital assets such as stock, bonds, and property.

If you sell a personal residence at a gain, you may be able to exclude up to $250,000 of the gain ($500,000 for a joint return) from your income.

To qualify to claim the exclusion, you must meet the ownership and use tests. This means that during the previous 5-year period you:

• Owned the home for at least two years (the ownership test)
• Lived in the home as your main home for at least two years (the use test)     For more information see:             Sale of Home