What is the maximum amount individuals may exclude from capital gains tax when selling their primary residence?

When selling a primary residence, the tax code allows individuals to exclude up to $250,000 of capital gains from taxation. This exclusion applies to single taxpayers who meet the ownership and use tests, meaning they must have owned and lived in the home for at least two of the last five years prior to the sale.

For married couples filing jointly, the exclusion goes up to $500,000, but since the question pertains specifically to individuals, the correct figure to remember is $250,000. This tax benefit is significant in helping homeowners keep more of their profit from the sale of their home, encouraging homeownership and mobility within the real estate market.

Understanding these exclusions can be particularly valuable for anyone in real estate, whether as a buyer, seller, or agent, since it directly affects financial planning and decision-making related to property transactions.