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

How do capital gains work when selling a home in Lafayette, Colorado?

When you sell a home in Lafayette and make a profit, that profit may be considered a capital gain and subject to taxes. However, many homeowners can exclude up to $250,000 (or $500,000 for married couples) from capital gains if certain conditions are met. With the right strategy and local market knowledge, Kirsten Johansson of The Levi Group Brokered by Real can help you sell smart and minimize your tax liability.

What Are Capital Gains?

Capital gains are the profits made when you sell a property for more than you paid for it. The IRS categorizes these as either:

• Short-term capital gains: If you owned the home for less than one year (rare for primary residences)

• Long-term capital gains: If you owned the home for more than one year

Most homeowners selling a primary residence will deal with long-term capital gains.

How to Qualify for the Capital Gains Exclusion

Under IRS rules, you can exclude up to $250,000 (single) or $500,000 (married filing jointly) in profit if:

1. The home was your primary residence for at least two of the last five years before the sale.

2. You haven’t used the exclusion for another home sale within the past two years.

This can significantly reduce or eliminate the capital gains tax you owe.

Example Scenario in Lafayette

• Purchased in 2015: $400,000

• Sold in 2025: $725,000

• Profit: $325,000

A married couple who qualifies for the exclusion can exclude up to $500,000 of that gain—meaning they’d owe no capital gains tax in this case.

Situations Where You May Owe Capital Gains Tax

• The home was not your primary residence (e.g., a rental or vacation home)

• You didn’t live in the home for two of the past five years

• You claimed the exclusion on another home within the last two years

• Your gain exceeds the allowed exclusion

If any of these apply, you may be subject to capital gains tax, which varies based on your income bracket (generally 15%–20%).

Reducing Capital Gains When You Don’t Qualify for the Full Exclusion

Even if you don’t meet the full exclusion rules, there are strategies to help reduce what you owe:

• Add capital improvements to your cost basis (e.g., major renovations)

• Track selling costs (commissions, closing costs, staging)

• Consider a 1031 exchange (for investment properties only)

Kirsten Johansson and The Levi Group work closely with tax professionals to guide clients through these decisions.

Lafayette Market Tip: Timing Matters

If you’re close to meeting the two-year residency requirement, it may make sense to wait a few months before listing. The Levi Group can help you evaluate this timeline and assess market conditions in real time.

Final Thoughts: Don’t Guess on Capital Gains—Get Expert Advice

Capital gains taxes can have a major impact on your net proceeds—but they’re also avoidable in many cases. With expert guidance from The Levi Group and coordination with your CPA, you can make confident decisions that maximize profit and minimize tax exposure.

Contact Kirsten Johansson of The Levi Group Brokered by Real
📧 kirsten@thelevigroup.net
📞 (603) 583-0151
🌐 www.thelevigroup.net

Your Lafayette Home Selling Experts

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.