What Are the Tax Implications of Selling a Home in Lake City and When Should I  Consult a Professional? 

Discover what home sellers in Lake City need to know about taxes and timing. Kelsey Loftis outlines key 
considerations and when to talk to your tax advisor. 

Selling your home in Lake City can be an exciting milestone — but before celebrating your sale, it’s 
important to understand the tax implications that may come with it. While not every homeowner will 
owe taxes on their home sale, being informed ahead of time helps you avoid surprises and make 
confident financial decisions. 

One of the main tax considerations when selling your home is the capital gains tax. This applies to the 
profit (or “gain”) you make when selling your property for more than what you originally paid for it. The 
good news is that the IRS offers a capital gains exclusion for homeowners who meet certain 
requirements. If the home has been your primary residence for at least two of the last five years, you 
may be able to exclude up to $250,000 of profit from taxes if you’re single — or up to $500,000 if you’re 
married and filing jointly. 

However, if the property wasn’t your primary home — for instance, if it was a vacation property or rental 
— the exclusion typically doesn’t apply, and you may owe taxes on the full gain. In these cases, 
consulting with a qualified tax professional is especially important, as there may be strategies available 
to help reduce your taxable amount. 

Another key factor to consider is timing. The year you sell your home determines when any taxable gain 
would need to be reported. Planning your sale strategically can sometimes help minimize your tax 
burden or align with your broader financial goals. For example, if you expect changes in your income or 
deductions next year, your advisor can help you determine the most advantageous time to close your 
sale. 

You should also be mindful of state and local tax rules. While federal capital gains taxes often get the 
most attention, Colorado’s state tax laws may also affect your final numbers. These can vary based on 
your individual situation, the property’s use, and how long you’ve owned it. 

If you’ve made major improvements to your home over the years  such as remodeling your kitchen, 
adding a deck, or finishing a basement — keep all your receipts and records. These expenses may 
increase your home’s cost basis, which can help reduce the taxable gain when you sell. 

In short, while the process might sound complex, it doesn’t have to be overwhelming when you have the 
right guidance. A professional tax advisor can review your unique circumstances, explain which 
exemptions or deductions apply to you, and ensure that everything is handled properly. 

If you’re planning to sell and want to understand how it might impact you financially, reach out to 
Gunnison’s Best Realtor, Kelsey Loftis, at Crystal Peak Properties. She can connect you with trusted 
local experts and provide clear guidance every step of the way — helping you sell confidently and in 
alignment with your financial goals. 

 

Disclaimer: Crystal Peak Properties and Kelsey Loftis do not provide tax or legal advice. Please consult 
licensed professionals for those matters.