Robert Irwin has written quite a bit about real estate, and I, as a real estate practitioner, have always enjoyed reading his wisdom. Below is a post from the Wall Street Journal's Real Estate Journal, where a man asks Irwin whether or not he can escape paying capital gains taxes on the sale of his home. Here's a snippet of the column:

Question: My wife and I are thinking of selling our house in Old Greenwich, Conn., which we've owned for nine years. We have invested approximately $750,000 in the house and are looking to sell it for $1.7 million. From what I understand, we would need to pay capital-gains taxes on profits over $500,000. My question is, can this tax be deferred by re-investing it in our next house and, if so, how much should we pay for a house to avoid the tax?

It's interesting to note that while the up-to-$500,000 exclusion (for married couples) benefits most home sellers, it actually can hurt those who have very large capital gains.

As Irwin pointed out, unfortunately you can no longer roll over any gains you had into a new home, but you can still exclude up to $500,000 if you're married. You should definitely talk to your account, though, if you're faced with a situation similar to Tom's. The exclusion is less if you are single.

-John Mudd
"Mr. Real Estate"