How to Money · Monday, July 27, 2026
A listener inquired about reducing their tax burden after selling a home for a profit exceeding the $500,000 deductible for married couples. The hosts clarified that taxes are typically owed only on profits above this threshold, and the 'cost basis' can be increased by purchase-related expenses and home improvements. They also noted that capital losses from other investments can offset capital gains from a home sale.
“My question. My husband and I soldier house this calendar year for an amount higher than the five hundred thousand dollars deductible, so we are looking for ways to reduce our tax burden.”
“Basically, when you sell a primary home, you actually don't typically ow tax on the increase in value unless the value has increased substantially. So maybe where you're at in Nashville, maybe you bought long enough ago, or the market has been so red fiery hot that you've actually managed to exceed this number, creating this tax bill. So you mentioned that you and your husband pocketed more than five hundred thousand dollars in profit, and married folks are going to owe tax on profit exceeding that number.”
“Also, capital losses from other investments can be used to offset the capital gains from the sale of your home too. So let's say, just hypothetical here, he bought bitcoin at the top. Right, you've been looking for an excuse to dump it. Now might be a great time to sell right and take a loss because it'll save you moneycomme tax time.”