primary residence exclusion

The primary residence exclusion allows homeowners to sell their primary home and potentially avoid paying capital gains tax on the profit. If you live in your home for at least two of the last five years before selling, you can exclude up to $250,000 in gains ($500,000 for married couples filing jointly). This means if you sell your house for significantly more than you bought it, you may not owe taxes on that profit, depending on the amount. This benefit encourages homeownership and provides financial relief when selling a primary residence.