How the estimate is built
- Gain = sale price minus selling costs minus your basis (what you paid plus buying costs plus improvements). See cost basis and tax reporting.
- Exclusion. If you owned and used the home as your main home for 2 of the last 5 years, the first $250,000 of gain is excluded ($500,000 for joint filers when both spouses meet the use test and one meets the ownership test).
- Federal tax on the rest at long-term rates. Your other taxable income fills the brackets first, then the gain sits on top. The 2026 brackets are in the table below.
- Net investment income tax of 3.8% applies to the smaller of your investment income (the taxable gain counts) or the amount your income is over $200,000 (single) or $250,000 (joint).
- Massachusetts taxes long-term gains at 5%, plus a 4% surtax on taxable income over the yearly threshold.
| Rate | Single | Married filing jointly |
|---|---|---|
| 0% | Up to $49,450 | Up to $98,900 |
| 15% | $49,451 to $545,500 | $98,901 to $613,700 |
| 20% | Over $545,500 | Over $613,700 |
When the result will be wrong
- You owned the home a year or less: gains are short-term, taxed as ordinary income federally and at 8.5% in Massachusetts. Not calculated here.
- You lived there less than two of the last five years: you may qualify for a partial exclusion (job change, health, unforeseen events). Not calculated here; see IRS Publication 523.
- The home was ever a rental, or part of it was a home office: depreciation you claimed (or could have claimed) is taxed separately, up to 25% federally.
- You inherited the house: your basis is usually the value on the date of death, which can erase most of the gain. See taxes on an inherited house.
- Head-of-household and married-filing-separately brackets differ slightly; single is used for both non-joint choices.
What to do with the number
Put the estimated tax into the net proceeds calculator (as an "other" cost) or into the cash offer vs listing tool so both routes are compared after tax. Ask a CPA to confirm before you sign anything, especially if the gain is near the exclusion limit.