Yes the home sale exclusion is applied before tax is calculated. It it excluded from taxable capital gains. Here is a link to the tax brackets for 2017.
In 2017, Capital gains tax rates for individuals were 15% for those individuals in the 25% - 35% marginal tax brackets and 20% for those individuals in the 39.6% marginal tax bracket. Zero percent for those in 10%-15% brackets.
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