Why Capital Gains Tax Matters When Selling a Home Selling a home is often one of the largest financial transactions a household will ever complete. For many homeowners, rising property values have created substantial housing wealth over the past decade. According to housing market data, U.S. homeowners accumulated nearly $150,000 in additional housing wealth over the past five years due to rising home prices. Housing appreciation has been dramatic. Over the past decade, U.S. home prices have increased by more than 100% nationally, reflecting strong demand and limited housing supply. This price appreciation means that many homeowners selling their property today may realize significant profits. These profits are commonly referred to as capital gains, which may be subject to federal taxes depending on several factors. However, U.S. tax law provides important protections for homeowners. Under Internal Revenue Code Section 121, homeowners may exclude a large portion of capital gains from…