Berkshire Hathaway HomeServices Professional Realty · Lindsey Trimm
Step Seven — Capital Gains
Step Seven

Understand your capital gains exposure before you close.

The proceeds from your home sale may be subject to federal and Ohio state capital gains tax. Knowing your exposure before you accept an offer gives you time to act.

Capital Gains Estimator

Estimate your federal and Ohio tax exposure

Enter your numbers below. The calculator applies the Section 121 primary residence exclusion automatically and estimates both federal and Ohio state liability. Consult a licensed CPA or tax attorney before making any decisions.

This calculator provides general estimates for educational purposes only. It does not constitute tax or legal advice. Consult a licensed CPA or tax attorney before closing.

Capital Gains Solutions

Four strategies available to qualifying sellers

These strategies are used by Ohio homeowners to legally reduce or defer capital gains tax exposure. Each requires professional guidance. Consult only licensed CPAs, tax attorneys, and financial advisors.

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Primary Residence Exclusion (Section 121)
Single filers may exclude up to $250,000 of capital gains. Married couples filing jointly may exclude up to $500,000. You must have owned and used the home as your primary residence for at least 2 of the 5 years before the sale. Can only be claimed once every 2 years.
Professional resource: Consult a CPA or tax attorney to confirm qualification and document your adjusted cost basis before listing.
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1031 Like-Kind Exchange
Defer capital gains tax entirely by reinvesting proceeds into another qualifying investment property. Must identify a replacement property within 45 days and complete the exchange within 180 days. Applies to investment and rental property, not a primary residence.
Professional resource: Requires a qualified intermediary engaged before the sale closes. Do not attempt without a licensed 1031 exchange facilitator.
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Installment Sale
Spread gain recognition across multiple tax years by receiving payments over time rather than a lump sum at closing. Can keep you in a lower federal and Ohio tax bracket in the year of the sale.
Professional resource: Requires careful contract language and a tax attorney. Cannot be combined with a 1031 exchange.
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Ohio Opportunity Zone Investment
Defer and potentially reduce federal capital gains tax by investing in a Qualified Opportunity Zone fund. Northeast Ohio has multiple designated QOZ areas in Cuyahoga County and surrounding counties.
Professional resource: Requires a licensed financial advisor and CPA with QOZ fund experience. Fund selection, timing, and holding period are all critical.
Important notice. This section contains general educational information only. It does not constitute tax or legal advice. Every seller's situation is unique. Tax law changes frequently. Engage a licensed CPA or tax attorney before making any decisions based on this information.

2025 Verified Tax Rates

Federal and Ohio rates at a glance

Federal long-term capital gains — 2025
RateSingleMarried Jointly
0%Up to $48,350Up to $96,700
15%Up to $533,400Up to $600,050
20%Above $533,400Above $600,050
+3.8% NIITIncome over $200KIncome over $250K
Source: IRS Publication 523; IRS Rev. Proc. 2024-61
Ohio state capital gains — 2025 and 2026

Ohio taxes capital gains as ordinary income. There is no preferential long-term rate as there is at the federal level.

2025: Graduated brackets from 0% to 3.125%.

2026: Ohio moves to a flat rate of 2.75% on all non-business income over $26,050.

Ohio follows the federal Section 121 exclusion — any gain excluded federally is also excluded from Ohio taxable income.

Source: Ohio Department of Taxation; Ohio H.B. 96, 2025
Lindsey Trimm
Berkshire Hathaway HomeServices Professional Realty
LTrimm@bhhspro.com
A Member of the Franchise System of BHHS Affiliates, LLC. Information provided for educational purposes only.
Lindsey Trimm · Berkshire Hathaway HomeServices Professional Realty
LTrimm@bhhspro.com · A Member of the Franchise System of BHHS Affiliates, LLC.