Section 121 Spotlight - Understanding The Home Sale Exclusion

In the latest episode of Amplified Wealth: According to Plan, Tom Farrell and Kate Fishbein dive into Section 121, the powerful (but often overlooked) tax break that can exclude up to $500,000 in capital gains when selling your primary residence.
 
Episode Highlights:
 
🏡 What is Section 121?
Learn how this IRS rule helps homeowners exclude up to $250K (single) or $500K (married) in capital gains from taxes when selling a primary residence.
 
📋 Eligibility Rules Made Simple
Break down the ownership, residency, and lookback tests to determine whether you qualify.
 
🧾 Cost Basis & Capital Improvements
Discover what counts toward your adjusted basis — and why saving your receipts could save you big.
 
🛠️ What Doesn’t Count
From utilities to paint touch-ups, find out which common home expenses don’t help your tax situation.
 
💰 Above the Limit? Don’t Panic.
Even gains beyond the exclusion get favorable tax treatment — and there may still be planning opportunities available.
 
And much more! 
 
Tune in now to Amplified Wealth and subscribe on all of your favorite podcast platforms (links above).

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Timestamps:

(0:00) – Cold Open / Catching Up
 
(2:05) – Today’s Topic: Section 121 Capital Gains Exclusion

(4:48) – What is Section 121? The Basics

(5:51) – Who Doesn’t Qualify for the Exclusion?

(9:08) – Lookback Rules: One Exclusion Every Two Years

(10:34) – What Increases Your Home’s Adjusted Basis?

(12:49) – What Doesn’t Count: Common Mistakes

(17:23) – Real-Life Example: Calculating Section 121 Exclusion

(20:14) – What Happens if Your Gain Exceeds the Exclusion Limit?

(21:18) – Case Study: Builder Using the Exclusion Strategically

(26:33) – Final Thoughts and Outro

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