A listener named Al asks, I plan to sell my primary residence for $1.5 million with a profit of $1 million, which will get reduced to $750,000 after claiming the $250,000

capital gains exemption.

If I buy a much smaller house for $600,000,

am I still taxed on the $750,000 of profit?

Thanks for the question, Al.

I'm going to answer it today on the show's first Friday

Q&A episode.

I'm Laura Adams, an author, spokesperson speaker,

founder of the Moneystack newsletter, and host of the Money of the Money

Podcast with 43 million downloads.

If you're not already subscribed to the show,

what are you waiting for?

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And if you've got a question that you'd like me to cover here on a Friday Q&A episode,

please leave it on our voicemail line just by calling 302 36403808. You can also send me an

email using my contact page at Laura D Adams. Adams.com.

All right, so let's talk about capital gains and losses

and get to Al's question.

But first, I want to review what capital gains are

and exactly how they relate to home selling.

You probably know that you pay ordinary income tax when you earn money from a job or you earn interest

on your bank account savings.

...