Hi, I'm Connor with Honor - message me here!
Your capital gain is not your sale price.
That one misunderstanding costs Santa Clarita sellers real money every single year, so let me clear it up.
Your gain is your sale price, minus your selling costs, minus your adjusted basis. And your basis is not just what you paid. Every capital improvement you made over the years adds to it. New roof. Room addition. Pool. Kitchen. HVAC. Windows. Solar you paid for. Block wall.
Which is why the cheapest tax savings in real estate is a shoebox full of receipts.
Here is a real example. A married couple buys in Saugus in 2004 for $525,000. Over the years they put in $75,000 of improvements and they kept the paperwork. Basis is now $600,000. They sell in 2026 for $1,150,000. After about $70,000 in commission and closing costs, their gain is $480,000.
They are married, they lived there the whole time, so the Section 121 exclusion shelters up to $500,000.
Their entire gain is excluded. Zero federal capital gains tax. Zero California tax.
That $75,000 in improvements they could PROVE is what kept them under the line.
Now here is the part that should get every long-time owner's attention. That $250,000 single / $500,000 married exclusion has not changed since 1997. It is not indexed to inflation. Santa Clarita home values have multiplied several times over since then. The shelter has not moved an inch.
More sellers blow past it today than ever did back then.
I broke the whole thing down: adjusted basis, the two-of-five-year rule, 2026 federal rates, the 3.8% surtax, why California has no capital gains rate at all and just taxes it like wages, the 3.33% Form 593 withholding that surprises people at closing, depreciation recapture on rentals, and stepped-up basis.
Full written breakdown: https://www.santaclaritaopenhouses.com/blog/capital-gains-tax-selling-your-home-santa-clarita-los-angeles-county-2026/
Video: https://youtu.be/TTRxgMtrTeA
I am a licensed agent, not a CPA and not a tax attorney. This is general information, not advice for your situation. Run your exact numbers with your own tax professional.
Connor T. MacIvor · CalDRE #01238257 · Sync Brokerage, Inc. · DRE #02031490
#SantaClarita #CapitalGains #HomeSelling #SantaClaritaRealEstate
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