Weird tax questions selling my house

[Jack B.]

The form escrow provided me asked if the sale of the house is greater than 250K if I'm single or 500K if I'm married. It doesn't ask about capital gains. Heck, I bought the house for more than twice the 250K amount they are asking about and I'm selling it for a little more than that but still under the 250K threshold for capital gains tax. I thought that the sale price was not what was important, that the capital gains were what was important, 250K if single, and 500K if married. I'm not sure the form is written correctly, it doesn't appear to be a standardized form from the IRS but just something the escrow company put together. The sale price is over 250K but I thought it was if the capital gains was more than 250K that I'd owe capital gains taxes. Not sure about this form or how to fill it out.

[Jack B.]

Originally posted by @Christopher Phillips:

@Jack B.

it's not the dollar amount of the property. It's the gain on what you sell it for vs. your cost basis.

Simple Example:

Buy for $100,000 in 1993. Single. Primary residence. Assuming you lived there 2 of the previous 5 years. No cost adjustments just for a simple case.

Sell it for $500,000 in 2018.

You have a gain of $500,000 less cost of $100,000 = $400,000 net gain

If you don't have an exemption you would pay capital gains on the $400,000 gain.

If you have an exemption as a married couple, you would be exempt up to $500,000 in gains. So, no cap gains if married.

If you were single, you would only be exempt up to $250,000. So, $400,000 less exemption of $250,000, so you would be responsible for capital gains on $150,000

Why does the escrow form ask about the sale price being 250k or 500k if married? It specifically says sale price.

It sounds like the down payment is irrelevant, it' the difference between purchase and sale price less expenses that for me as an unmarried person has to be 250k or less capital gains to be exempt under primary residence rules, correct?