Home Sale Section 121 Exclusion Calculator 2026

Estimate your 2026 federal tax on a primary-residence sale under IRC § 121. Applies the $250,000 single / $500,000 married-filing-jointly exclusion, ownership and use tests (2 of last 5 years), partial-exclusion safe harbors, long-term capital gains tax, NIIT, and state CGT. Free, private, runs entirely in your browser.

Filing & Eligibility
$250,000 exclusion single, $500,000 if MFJ and both spouses meet the tests.
Need 2+ of the last 5 years for full exclusion.
Need 2+ of the last 5 years (need not be continuous).
Once-every-2-years rule under § 121(b)(3).
Pro-rated partial exclusion under § 121(c) if you fail the 2-year tests for a qualifying reason.
Used only if partial-exclusion safe harbor is selected. 12 of 24 months = 50% of $250k or $500k.
Sale Numbers
Gross contract price before commissions.
Original purchase price + closing costs at purchase.
Additions, remodels, new roof — not repairs. Increases adjusted basis.
Realtor commissions, transfer taxes, escrow, title fees.
Tax Estimate Inputs
Drives LTCG bracket and NIIT 3.8% MAGI threshold.
Some states (e.g. CA) tax CGT as ordinary income — set 0 if no state CGT.
Taxable gain after § 121 exclusion
$0
Estimated total federal + state tax
$0
Applicable exclusion
$0
Net cash after tax
$0
Calculation Breakdown
StepAmount
2026 LTCG brackets used: 0% bracket up to $48,350 (single) / $96,700 (MFJ) of taxable income; 15% bracket up to $533,400 (single) / $600,050 (MFJ); 20% above. NIIT 3.8% applies on the lesser of net investment income or MAGI excess over $200,000 (single) / $250,000 (MFJ). Estimates only — verify final 2026 brackets in IRS Revenue Procedure 2025-19.

Source: IRS Publication 523 — Selling Your Home + IRC § 121 (Cornell LII). Last updated: May 3, 2026.
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What Is the Section 121 Home Sale Exclusion?

The Section 121 home sale exclusion is the IRS rule that lets you exclude up to $250,000 of capital gain ($500,000 if married filing jointly) from federal income tax when you sell a primary residence. It is codified at Internal Revenue Code § 121 and detailed in IRS Publication 523. The exclusion applies only to your primary home, only to the gain (not the sale price), and is available once every two years per taxpayer. Source: IRS Publication 523.

To qualify for the full exclusion, you must satisfy two simultaneous tests during the 5-year period ending on the sale date: the ownership test (you owned the home for at least 24 months) and the use test (you used it as your principal residence for at least 24 months). The 24 months do not have to be consecutive, and short absences for vacation or other temporary reasons still count as use.

2026 Exclusion Amounts and Filing Status

The § 121 exclusion limits are not indexed to inflation — they have been fixed at $250,000 (single, head of household, married filing separately) and $500,000 (married filing jointly) since 1997. For 2026, the same caps apply. To claim the full $500,000 MFJ exclusion, both spouses must satisfy the use test, only one spouse must satisfy the ownership test, and neither spouse can have used the § 121 exclusion in the prior 24 months. If only one spouse qualifies, the couple is generally limited to $250,000.

Partial-Exclusion Safe Harbors (§ 121(c))

If you fail the 24-month ownership or use test because of a change in employment (more than 50 miles farther from the home), a health-related reason, or an unforeseen circumstance defined by Treasury regulations (death, divorce, multiple births from a single pregnancy, involuntary conversion, etc.), you can still claim a pro-rated portion of the $250,000 / $500,000 exclusion. The pro-ration is the smaller of the months actually owned or used, divided by 24. For example, a single filer who lived in the home for 12 months and qualifies for the work safe harbor can exclude 12 ÷ 24 × $250,000 = $125,000.

Capital Gains Tax, NIIT, and Net Cash After Sale

Any gain above the § 121 exclusion is taxable as a long-term capital gain because a primary residence held more than one year qualifies for LTCG treatment. The 2026 federal LTCG brackets are 0%, 15%, and 20%, applied on top of your other taxable income (ordinary income fills the 0% bracket first). High earners also pay the 3.8% Net Investment Income Tax under IRC § 1411 on the lesser of net investment income or MAGI excess above $200,000 single / $250,000 MFJ. Many states tax capital gains as ordinary income — California, for example, taxes home sale gains at marginal rates up to 13.3%. The calculator above runs all four layers (federal 0/15/20%, NIIT, state, exclusion) so you see exactly how much of your gain is shielded and how much you owe. Last updated: May 3, 2026.