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Martin Barraud | Ojo Images | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
As President Donald Trump<\/a> weighs ending capital gains taxes<\/a> on home sales to bolster the housing market, experts say it’s possible to lower your bill<\/a> without legislative changes.<\/p>\n When asked about the idea this week in the Oval Office, Trump told reporters, “we’re thinking about that.”<\/p>\n Under current law, you can trigger capital gains taxes<\/a> for a primary home sale if your profit exceeds $250,000 for single filers or $500,000 for married couples filing together.<\/p>\n More from Personal Finance:<\/strong> If your home sale profit is above $250,000 or $500,000, you pay capital gains tax of 0%, 15% or 20%, depending on your taxable income. (You calculate taxable income by subtracting the greater of the standard deduction or itemized deductions from adjusted gross income<\/a>.)<\/p>\n Some higher earners also owe a 3.8% surcharge, known as net investment income tax<\/a>, on home sales profits above the thresholds.<\/p>\n<\/div>\n While home prices have soared over the past couple of decades, most sellers are under the $250,000 or $500,000 profit thresholds, experts say.<\/p>\n Those impacted are typically “older homeowners, people who have been in their house for many, many years,” said William McBride, chief economist at the Tax Foundation.\u00a0<\/p>\n<\/div>\n Roughly 34% of homeowners could exceed the $250,000 threshold for single filers, and 10% could be above the $500,000 limit for married couples filing jointly, according to a\u00a02025 study<\/a>\u00a0from the National Association of Realtors, which has advocated for\u00a0capital gains reform<\/a>\u00a0for home sales.<\/p>\n If you’re planning to sell your home and expect profits above the thresholds, here are some ways to lower your capital gains tax bill, experts say.<\/p>\n<\/div>\n Many home sellers don’t know they can trim capital gains by increasing their “cost basis,” or the home’s original purchase price, according to Boston-area certified financial planner Catherine Valega, founder of Green Bee Advisory. She’s also an enrolled agent, which is a tax license to practice before the IRS.<\/p>\n You can increase your basis by adding “capital improvements,” such as renovations that “improve the resale value of your home,” she said.\u00a0\u00a0<\/p>\n
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