Selling your home tax free when you are single.

[Gray Bryan]

I am single and own a house free and clear and it's worth about $500k. Under current laws I can only exempt $250k from capital gains. I could get married and file jointly and the exemption would be $500k which is enough to cover me.

What other options are there? :)  If I took out a home equity loan and pulled out $250k, sold the house and paid off the home equity loan, which this accomplish the same thing?

[Basit Siddiqi]

@Gray Bryan

Taking out a HELOC/loan won't decrease your taxable gain.

Gain is calculated as sales price less adjusted basis(purchase price + improvements - depreciation taken).

It looks like there is currently a taxable gain of about $125,000 unless there is significant improvement.