If you are a homeowner, when you sell your house, there is a nice exclusion from the capital gains due on the sale. If you have lived in the house for 2 or the previous 5 years, a married couple can exclude $500,000, and a single person can exclude $250,000. Another way to reduce the taxable gain from a house that has or will appreciate a great deal is to save receipts for capital improvement you make over the year. Those capital improvements increase the cost basis of the house and thus reduce the taxable capital gain.