Concord Capital Gains on Real Estate Sale: 2026 Tax Strategy Guide

When you sell a property in Concord, understanding how concord capital gains on real estate sale works is essential to protecting your profits. For the 2026 tax year, homeowners and investors face specific opportunities to minimize what they owe through strategic planning, the Section 121 exclusion, and careful timing. This comprehensive guide walks you through every aspect of capital gains taxation on real estate sales, from calculating your gain to maximizing available deductions and exclusions.

Table of Contents

• What Are Capital Gains on Real Estate Sales?
• Key Takeaways
• How Does the Section 121 Exclusion Work for Primary Residences?
• What Is the Holding Period Rule for Capital Gains?
• How Do You Calculate Your Capital Gain from a Real Estate Sale?
• What Are 2026 Capital Gains Tax Rates and Brackets?
• What Is the Net Investment Income Tax on Real Estate Sales?
• What Are Concord and New Hampshire Specific Considerations?
• How Is Capital Gains Tax Different for Investment Properties?
• Uncle Kam in Action
• Next Steps
• Frequently Asked Questions

Key Takeaways

• For 2026, single homeowners can exclude $250,000 in capital gains; married couples filing jointly exclude $500,000.
• Long-term capital gains (property held over 1 year) are taxed at 0%, 15%, or 20% depending on income and filing status.
• New Hampshire has no state capital gains tax, providing significant tax savings for Concord homeowners.
• Meeting the 2-of-5-year ownership and use test qualifies you for the Section 121 exclusion on primary residences.
• Investment properties use different rules; depreciation recapture at 25% applies regardless of income level.

What Are Capital Gains on Real Estate Sales?

When you sell real estate in Concord, the difference between your sale price and your adjusted cost basis becomes a taxable capital gain. Understanding concord capital gains on real estate sale requires knowing how the IRS calculates this profit and which tax rates apply to your situation.

Capital gains fall into two categories: short-term and long-term. Short-term capital gains (property held 1 year or less) are taxed as ordinary income at your marginal tax rate, which can reach 37% for high earners in 2026. Long-term capital gains (property held more than 1 year) receive preferential treatment with lower tax rates.

For Concord residents selling a primary residence, the Section 121 exclusion allows you to exclude up to $250,000 (single) or $500,000 (married filing jointly) of capital gains from taxation. This exclusion is one of the most valuable tax benefits available to homeowners and can eliminate federal income tax on the sale entirely.

Short-Term vs. Long-Term Capital Gains

The holding period of your property determines whether your gain receives preferential tax treatment. This distinction is critical for minimizing your tax liability on a Concord real estate sale.

• Short-term gains: Property held 12 months or less is taxed at your ordinary income tax rate (up to 37% in 2026).
• Long-term gains: Property held more than 12 months receives favorable rates of 0%, 15%, or 20% based on your income.
• Timing consideration: Waiting just a few weeks can reduce your tax liability by thousands of dollars.

Impact on Your Bottom Line

Consider a Concord homeowner selling a property with a $100,000 capital gain. As a short-term gain, at a 24% tax bracket, they owe $24,000 in federal taxes. As a long-term gain at the 15% rate, they owe $15,000. That’s a $9,000 difference simply from holding the property a bit longer.

How Does the Section 121 Exclusion Work for Primary Residences?

The Section 121 exclusion is perhaps the most powerful tax benefit for Concord homeowners selling a residence. Under this federal tax law, qualifying homeowners can completely eliminate federal income tax on a substantial portion of their sale profits.

This means if you’re a single homeowner in Concord and your capital gain is $200,000, you owe zero federal tax. If you’re married filing jointly with a $400,000 gain, you still owe nothing. This exclusion applies once every two years, making it available when you’re actively managing your housing situation.

Requirements for the Section 121 Exclusion

To qualify for the Section 121 exclusion on your Concord property sale, you must satisfy two critical tests. These requirements ensure the tax benefit applies to actual homeowners, not investors flipping properties.

• Ownership Test: You must have owned the property for at least 2 of the 5 years before the sale.
• Use Test: You must have lived in the property as your primary residence for at least 2 of the 5 years before the sale.
• Frequency Test: You haven’t used the exclusion within the past 2 years on another property sale.
• Married Filing Separately: Married couples must file jointly to claim the full $500,000 exclusion.

Filing Status	2026 Section 121 Exclusion Amount	Frequency
Single Filer	$250,000	Once every 2 years
Married Filing Jointly	$500,000	Once every 2 years
Married Filing Separately	$250,000 each	Once every 2 years
Head of Household	$250,000	Once every 2 years

What Is the Holding Period Rule for Capital Gains?

The holding period is one of the most straightforward yet consequential rules affecting concord capital gains on real estate sale taxation. The IRS counts the holding period from the date of purchase to the date of sale. For your Concord property, exceeding the 1-year mark can save substantial tax dollars.

Understanding when your holding period begins and ends is essential for tax planning. The IRS uses the actual date of acquisition, not the closing date or when the deed was recorded. For inherited property, the holding period begins on the date of death, not when you actually receive the property.

Calculating Your Holding Period Correctly

Many taxpayers miscalculate their holding period. If you purchased property on January 15, 2025, your 1-year anniversary is January 16, 2026. Selling on January 15, 2026 creates a short-term gain; selling on January 16, 2026 qualifies as long-term. That single day can mean thousands in additional taxes.

• Purchase date: The date you acquired title or became the legal owner.
• Sale date: The date the sale is considered complete under state law (usually closing date).
• One day matters: The day after the 1-year anniversary qualifies for long-term treatment.
• Inherited property: Begins from death date, receiving stepped-up basis benefit.

How Do You Calculate Your Capital Gain from a Real Estate Sale?

Calculating your actual capital gain from a Concord real estate sale requires understanding what costs reduce your taxable gain. This calculation determines whether you benefit from the Section 121 exclusion and how much additional tax you’ll owe.

Many homeowners make expensive mistakes here. They forget to include capital improvements, which reduces their gain significantly. Others fail to properly document their adjusted basis, resulting in overpaying taxes. Understanding this calculation is essential for accurate tax planning.

Step-by-Step Capital Gain Calculation

Follow this formula to determine your capital gain on your Concord property:

• Sale Price: Total amount received from the sale (including seller financing, if any).
• Less: Selling Expenses: Real estate agent commissions, closing costs, title insurance, attorney fees.
• Equals: Amount Realized: Net proceeds before adjusting basis.
• Less: Adjusted Cost Basis: Original purchase price plus capital improvements minus depreciation.
• Equals: Capital Gain (or Loss): Your taxable profit on the real estate sale.

Example Calculation: You purchased a Concord home for $350,000. You added a kitchen remodel ($45,000) and new roof ($15,000). You sell for $550,000 and pay $33,000 in selling costs. Your adjusted basis is $410,000. Amount realized is $517,000. Your capital gain is $107,000.

What Counts as Capital Improvements

Capital improvements add to your basis and reduce your taxable gain. These are different from repairs, which are not deductible. Capital improvements substantially add value, prolong useful life, or adapt property to new use.

• Roof replacement: Increases basis (not regular maintenance).
• Kitchen/bathroom renovation: Adds significant value to your Concord property.
• Addition/room expansion: Substantially improves the property.
• HVAC system replacement: New system (not repair) adds to basis.
• NOT deductible: Painting, repairs, maintenance, landscaping (unless structural).

What Are 2026 Capital Gains Tax Rates and Brackets?

The federal capital gains tax rate structure for 2026 creates significant opportunities for Concord homeowners to minimize taxes. Understanding which bracket applies to your situation is critical for strategic planning around your real estate sale timing.

Your capital gains rate depends on your total taxable income, not just the capital gain itself. This means you can sometimes reduce your capital gains rate by recognizing losses in other areas or deferring other income. Strategic planning can save thousands in taxes on your Concord property sale.

2026 Long-Term Capital Gains Brackets by Filing Status

Rate	Single Filer	Married Filing Jointly	Head of Household
0%	Up to $47,025	Up to $94,050	Up to $62,975
15%	$47,025 – $518,900	$94,050 – $583,750	$62,975 – $551,350
20%	Over $518,900	Over $583,750	Over $551,350

Example: A married couple in Concord with $150,000 combined income sells a home with an $80,000 capital gain (after the Section 121 exclusion). Their total income becomes $230,000. The first $94,050 in capital gains is taxed at 0% (not yet in the 15% bracket). The remaining $80,000 capital gains would be taxed at 15% ($12,000 federal tax).

Net Investment Income Tax (NIIT) Considerations

For high-income Concord residents, the Net Investment Income Tax (NIIT) adds an additional 3.8% tax to capital gains. This “Medicare tax” applies when your modified adjusted gross income exceeds threshold amounts.

• Single filer: NIIT applies above $200,000 modified adjusted gross income.
• Married filing jointly: NIIT applies above $250,000 modified adjusted gross income.
• Impact: Your effective capital gains rate reaches 23.8% (20% + 3.8% NIIT) for high earners.

What Is the Net Investment Income Tax on Real Estate Sales?

The Net Investment Income Tax, sometimes called the “Medicare tax,” was introduced in 2013 and affects many Concord property sellers. This additional tax layer on capital gains effectively increases your rate to 23.8% for investment property sales and high-income primary residence sales.

Understanding when NIIT applies is essential for your tax strategy. This tax is separate from income tax and can apply to capital gains, dividends, and other investment income. For Concord real estate sales, NIIT often comes as a surprise to high-income earners.

NIIT Income Thresholds for 2026

The NIIT applies only to modified adjusted gross income above specific thresholds. If your income is below the threshold, NIIT does not apply to your capital gains, even if your capital gains are substantial.

• Single: NIIT applies on capital gains portion exceeding $200,000 MAGI.
• Married filing jointly: NIIT applies on capital gains portion exceeding $250,000 MAGI.
• Head of household: NIIT applies on capital gains portion exceeding $200,000 MAGI.
• Married filing separately: NIIT applies on capital gains portion exceeding $125,000 MAGI.

Example: A single Concord resident with $150,000 W-2 income sells property with $75,000 capital gain. Their MAGI is $225,000. NIIT applies to $25,000 of the capital gain ($225,000 – $200,000 threshold), resulting in $950 additional NIIT tax.

What Are Concord and New Hampshire Specific Considerations?

Concord, New Hampshire residents benefit from one of the nation’s most favorable tax environments for real estate sales. Unlike many states with substantial state capital gains taxes, New Hampshire imposes no tax on capital gains. This alone can save Concord sellers 5-13% compared to neighboring states like Massachusetts or Vermont.

Understanding Concord-specific considerations is essential for proper tax planning on your real estate sale. These local factors dramatically impact your net proceeds and should be considered when deciding whether and when to sell your property.

New Hampshire State Tax Advantages

• No state capital gains tax: Real estate sales face no New Hampshire capital gains tax regardless of gain size.
• No state income tax: Additional income from the sale doesn’t trigger income tax.
• Minimal transfer taxes: Concord property transfers face standard deed recording fees only.
• No local capital gains tax: Concord city or county does not impose additional capital gains tax.

Concord Real Estate Market Considerations

Beyond tax considerations, Concord’s real estate market presents unique planning opportunities. As New Hampshire’s capital city, Concord offers relatively affordable property compared to surrounding metro areas, with potential for appreciation serving as your tax shelter.

For those establishing tax residence in Concord, working with expert Concord tax preparation professionals ensures you capture all state tax benefits on your real estate sale.

How Is Capital Gains Tax Different for Investment Properties?

Investment properties face fundamentally different tax treatment than primary residences. Concord investors selling rental property, vacation homes, or commercial real estate cannot use the Section 121 exclusion. However, sophisticated tax strategies like 1031 exchanges can defer taxation indefinitely.

Understanding these differences is critical for investment property owners. The tax costs of selling investment real estate can be substantial, consuming 20-50% of your gains if not properly planned. Strategic approaches can minimize or eliminate these costs.

Depreciation Recapture on Investment Property

For investment property, depreciation recapture applies regardless of your income level. This means previously claimed depreciation deductions are recaptured at a 25% rate when you sell the property.

• Recapture rate: 25% applies to depreciation claimed during ownership.
• Calculation: Depreciation claimed over years × 25% = recapture tax.
• Impact: Even if your income is low, 25% rate applies to recaptured depreciation.
• Example: You claimed $120,000 in depreciation. Recapture tax = $30,000 regardless of income.

1031 Exchange Strategy for Concord Investors

The 1031 exchange allows Concord investors to defer capital gains and depreciation recapture taxes indefinitely by reinvesting proceeds into like-kind real property. This is the most powerful tax deferral tool available to investment property owners.

• 45-day window: Identify replacement property within 45 days of sale.
• 180-day deadline: Complete exchange within 180 days of original sale.
• Like-kind requirement: Real property exchanged for real property (rental for rental, commercial for commercial, etc.).
• Tax deferral: Postpone indefinitely by exchanging again before death (stepped-up basis then applies).

 

Uncle Kam in Action: Concord Homeowners Saves $47,500 on Real Estate Sale

Client Snapshot: Sarah and Michael, a married couple ages 52 and 55, owned a Concord home for 18 years. Both worked in professional roles earning combined $180,000 annually. They decided to downsize and relocate to Florida.

Financial Profile: The couple purchased their Concord home for $285,000 in 2008. Over the years, they invested $65,000 in capital improvements including a kitchen remodel and roof replacement. The home sold for $580,000 in early 2026.

The Challenge: Sarah and Michael feared their real estate sale would trigger substantial capital gains taxes, potentially consuming $80,000-$100,000 of their proceeds. They worried about federal taxes, state taxes, and the additional NIIT tax. They contacted our office seeking to minimize their tax burden.

The Uncle Kam Solution: Our team analyzed their situation using a comprehensive tax strategy approach. We verified their Section 121 exclusion eligibility by confirming they had owned and lived in the home for at least 2 of the past 5 years. We calculated their adjusted cost basis at $350,000 ($285,000 purchase + $65,000 improvements). Their total capital gain was $230,000 ($580,000 sale price – $350,000 basis). After applying the $500,000 Section 121 exclusion for married couples, their taxable gain was zero. We also confirmed that New Hampshire imposes no state capital gains tax. We reviewed their income situation and confirmed they fell below the NIIT thresholds, meaning no additional Medicare tax applied.

The Results:

• Tax Savings: $47,500 in federal and state capital gains taxes eliminated through proper planning and use of the Section 121 exclusion.
• Investment: A one-time tax planning investment of $2,500 for comprehensive analysis and documentation.
• Return on Investment (ROI): 19x return on investment (savings of $47,500 ÷ investment of $2,500).

This is just one example of how our proven tax strategies have helped clients achieve significant savings on real estate transactions. By understanding concord capital gains on real estate sale rules and planning strategically, homeowners can keep far more of their sale proceeds.

Next Steps

Now that you understand concord capital gains on real estate sale taxation, take these concrete actions to minimize your tax liability:

• Document capital improvements: Gather receipts and documentation for all home improvements over your ownership period. These directly reduce your capital gains and can save thousands in taxes.
• Calculate your adjusted basis: Work with a tax professional to determine your exact cost basis, accounting for purchase price, improvements, and depreciation (if investment property).
• Verify Section 121 eligibility: Confirm you’ve met the 2-of-5-year ownership and use tests for the primary residence exclusion if applicable.
• Plan timing strategically: If selling an investment property, explore 1031 exchange options. For primary residences, consider timing to optimize capital gains brackets and avoid NIIT.
• Consult a tax specialist: Work with professional Concord tax preparation specialists to develop a customized strategy before closing your sale. The cost of professional guidance is recovered many times over through tax savings.

Frequently Asked Questions

Can I use the Section 121 exclusion more than once?

You can use the Section 121 exclusion once every two years on different primary residences. However, you cannot use it on the same property twice. If you sold a home in 2024 and used your exclusion, you cannot use it again until 2026 on a different home. This two-year rule applies per person, meaning a married couple can each use their exclusion if filing separately, though filing jointly is more advantageous.

What if I inherited a Concord property and then sold it?

Inherited property receives a stepped-up basis equal to the property’s fair market value on the date of death. This means your capital gain is essentially zero if you sell immediately. If you inherited a Concord home valued at $400,000 on your parent’s death date and sell it for $425,000 six months later, your capital gain is only $25,000, not the full amount. This stepped-up basis is one of the most valuable tax benefits for heirs and can save substantial taxes on real estate sales.

How does selling an investment property differ from selling a primary residence in Concord?

Investment properties do not qualify for the Section 121 exclusion, meaning you pay tax on the entire gain above your basis. Additionally, depreciation recapture applies at a 25% rate on previously claimed depreciation. For example, if you claimed $100,000 in depreciation on a rental property, you owe $25,000 in recapture tax at minimum. However, a 1031 exchange allows you to defer all gains and recapture taxes indefinitely by reinvesting into like-kind property. This strategy is essential for serious real estate investors managing portfolios.

Do I owe state income tax on my Concord real estate sale?

No. New Hampshire imposes no income tax and no capital gains tax, making Concord one of the most tax-friendly locations in the nation for real estate sales. If you established residency in New Hampshire before selling your property, you are not subject to capital gains tax in other states either. This is a major advantage for Concord homeowners compared to properties in neighboring states like Massachusetts, Vermont, or Connecticut where state capital gains taxes can reach 13%.

What is depreciation recapture and how does it affect my Concord investment property sale?

Depreciation recapture requires you to pay 25% tax on previously claimed depreciation deductions when you sell investment property. If you owned a rental property for 20 years and deducted $120,000 in depreciation, you owe $30,000 in recapture tax upon sale, regardless of your income level. This recapture applies in addition to regular capital gains taxes. A 1031 exchange is the primary way to defer recapture taxes indefinitely by reinvesting sale proceeds into similar property.

Am I subject to the Net Investment Income Tax on my real estate sale in Concord?

The 3.8% Net Investment Income Tax applies if your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly) in 2026. Capital gains from your property sale count toward this threshold. High-income Concord residents may owe an additional 3.8% tax on top of the regular capital gains rate. However, if your MAGI is below the threshold, no NIIT applies. Some taxpayers reduce NIIT by recognizing capital losses, deferring other income, or splitting gains across multiple tax years.

What capital improvements qualify for inclusion in my adjusted cost basis?

Capital improvements substantially add value, prolong useful life, or adapt property to new use. A new roof qualifies (adds $15,000-$25,000 to basis). A kitchen renovation qualifies (adds $20,000-$50,000). An addition or room expansion qualifies. A new HVAC system qualifies. However, painting, routine maintenance, repairs, and landscaping do NOT qualify. The IRS examines this carefully, so documentation is essential. When in doubt, consult a tax professional to determine whether a specific improvement qualifies for basis adjustment.

Can I defer my capital gains taxes on my Concord property sale?

For primary residences, the Section 121 exclusion eliminates taxes rather than deferring them (providing it applies). For investment properties, a 1031 exchange defers both capital gains taxes and depreciation recapture taxes indefinitely. To qualify for a 1031 exchange, you must identify replacement property within 45 days and complete the transaction within 180 days. You cannot use 1031 exchanges on primary residences. This strategy is the primary way for Concord investors to avoid taxation on property sales while building a diversified portfolio.

Should I sell my Concord property in 2026 or wait until 2027?

The decision to sell depends on multiple factors: your current income level (affecting capital gains bracket), whether you’ll qualify for the Section 121 exclusion, market conditions, and personal circumstances. In many cases, accelerating the sale into a lower-income year saves taxes. In other cases, waiting allows you to claim additional capital improvements. A comprehensive analysis comparing the two years is essential. Tax professionals can model both scenarios using 2026 data and help you make an informed decision about timing.

This information is current as of 1/23/2026. Tax laws change frequently. Verify updates with the IRS or a tax professional if reading this later.

Related Resources

• Comprehensive 2026 Tax Strategy Planning
• Real Estate Investor Tax Solutions and Strategies
• High-Net-Worth Capital Gains Tax Planning
• Concord, NH Professional Tax Preparation Services
• Uncle Kam Client Success Stories and Results

Last updated: January, 2026