How to Sell Home Capital Gains Tax in Fort Collins [Expert Advice from The Levi Group Brokered by Real]

How do I reduce or avoid capital gains tax when selling my home in Fort Collins?

If you're planning to sell your home in Fort Collins, understanding how capital gains tax applies is essential to maximizing your net proceeds. The IRS allows homeowners to exclude a large portion of their gain from taxes if specific criteria are met. Knowing the local market, documenting your expenses, and timing your sale strategically can all play a role in minimizing your tax burden. Always consult a licensed tax professional before making final decisions.

What Is Capital Gains Tax and When Does It Apply?

Capital gains tax is a federal tax on the profit you make when selling your home. The taxable gain is the difference between your home's sale price and your adjusted cost basis (what you paid, plus improvements).

Example:

• Bought in 2014 for $300,000

• Invested $50,000 in upgrades

• Sold in 2025 for $475,000

• Adjusted basis: $350,000

• Taxable gain: $125,000

But depending on your circumstances, this gain could be partially—or entirely—excluded.

Capital Gains Tax Exclusion Rules

The IRS provides a generous exclusion for primary residences:

• $250,000 of gain for single filers

• $500,000 of gain for married couples filing jointly

You qualify if:

• You owned and lived in the home as your primary residence for at least 2 of the last 5 years

• You haven’t used the exclusion on another property in the past 2 years

If you meet these conditions, your taxable gain could be zero—even in a strong market like Fort Collins.

Fort Collins Real Estate and Capital Gains

Fort Collins has seen steady appreciation, especially in areas like:

• Old Town Fort Collins

• Fossil Lake Ranch

• Rigden Farm and Southeast Fort Collins

If you purchased your home more than 5–10 years ago, there's a good chance you've built significant equity—potentially creating a capital gains liability if the exclusion doesn’t fully cover your gain.

Strategies to Minimize Capital Gains Tax

1. Stay in Your Home Longer

Qualifying for the primary residence exclusion is one of the most effective ways to reduce or eliminate tax liability.

2. Track Home Improvements

Major upgrades—like finishing a basement, installing a new roof, or adding square footage—add to your cost basis and reduce your gain.

3. Plan Your Sale Strategically

Consult with a Realtor and CPA to evaluate market timing and tax-year implications.

4. Consider a 1031 Exchange (for Rentals)

If selling an investment property, a 1031 exchange lets you reinvest proceeds into a similar property and defer the capital gains tax.

What About Investment Properties?

Capital gains exclusions do not apply to rentals or second homes. However, you can:

• Depreciate the property while you own it

• Deduct selling expenses

• Use a 1031 exchange to delay taxes

We highly recommend working with a tax advisor to build a personalized strategy.

Why Work With The Levi Group Brokered by Real?

We’re more than just listing agents—we’re strategic partners. At The Levi Group Brokered by Real, we help Fort Collins sellers:

• Understand how taxes will affect their bottom line

• Maximize home value with smart pre-listing upgrades

• Time the market and prepare for a strong launch

• Coordinate with trusted CPAs and title companies

Whether you’re upsizing, downsizing, or selling an inherited property, we make sure you’re fully informed.

Final Thoughts

Understanding how capital gains tax works can prevent surprises and preserve your equity. Fort Collins homeowners with long-held properties may be sitting on large gains—but that doesn’t mean a big tax bill is inevitable.

Partner with a local expert to price, prepare, and sell your home efficiently—and protect your profits.

Ready to sell smarter, not harder? Contact Levi Group today for your free consultation.
📞 Call or Text: (970) 426-8916
📧 Email: jason@thelevigroup.net
🌐 TheLeviGroup.net

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or tax advice. Please consult with licensed professionals regarding your specific situation.