If your property is in Reno, Sparks, Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, or Verdi, this page explains the basics so you can talk with your tax professional with confidence.

Key Takeaways (Fast)

• Federal taxes: Profit on a second home is usually a capital gain. If the place was ever a rental, part of your gain may be taxed as depreciation recapture (a special category of gain).
• Nevada taxes: Nevada has no state personal income tax. But every county collects a Real Property Transfer Tax (RPTT) when the deed is recorded.
• Primary-home break is different: The popular $250,000/$500,000 exclusion is for your main home (special rules apply if you converted the property to your main home).
• 1031 exchange: Can defer tax for investment property (not personal-use vacation homes), if very specific rules are met.
• Paperwork: Expect a 1099-S at closing; most second-home sales are reported on Form 8949 and Schedule D at tax time. Rentals may also involve Form 4797.
• High-income sellers may also owe a 3.8% Net Investment Income Tax on part of the gain (your CPA can confirm).

Federal Tax Basics for Second Homes

Capital gains in simple terms

Sell for more than your adjusted basis (what you paid plus certain improvements and selling costs), and you have a capital gain. If you owned the property for more than one year, that’s generally a long-term gain. Long-term gains are taxed at federal rates that are usually 0%, 15%, or 20%, depending on your income. High-income sellers may also owe a 3.8% Net Investment Income Tax on part of the gain. (Your CPA can check your exact bracket and NIIT status.)

When a rental is involved: depreciation recapture

If you ever rented the property (for example in Sparks, Fernley, or Gardnerville) and claimed depreciation, part of your profit is treated as depreciation recapture, often taxed up to 25% before the remaining long-term gain rates apply. This is a normal rule for selling depreciated real estate.

Does the home-sale exclusion apply?

The primary residence rule (the “2-out-of-5” test)

The well-known exclusion—up to $250,000 of gain if single or $500,000 if married filing jointly—applies to your principal residence when you’ve both owned and used it as your principal residence for at least 2 of the last 5 years before the sale. A second home used mostly for vacations generally doesn’t qualify unless you truly made it your primary home. Periods of “nonqualified use” after 2008 can shrink any exclusion when a former rental becomes your main home.

Nevada Taxes at Closing

Real Property Transfer Tax (RPTT)

Nevada charges a statewide base RPTT of $1.95 per $500 of value (amounts over $100). Some counties add a small extra amount. For example, Washoe County (Reno, Sparks, Sun Valley, Verdi) adds $0.10 per $500, making the local total $2.05 per $500. County recorders collect this tax at recording, using your RPTT Declaration of Value to determine the amount.

Who is responsible for RPTT?

Under Nevada law, the buyer and seller are jointly and severally liable for RPTT. Your purchase agreement can assign who pays, but the county can collect from either party if there’s a shortfall. Escrow will compute the tax so the deed can be recorded.

No state income tax

Good news for sellers in Carson City, Dayton, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Silver Springs, Stagecoach, Silver City, and Virginia City: Nevada does not impose a state personal income tax. You’ll review federal tax only (plus normal closing costs like RPTT).

Which IRS Forms Will You See?

• Form 1099-S: The person responsible for closing (often the title/escrow company) generally reports real estate sale proceeds to the IRS and provides you a copy.
• Form 8949 & Schedule D: A second home is a capital asset; the sale is typically reported on Form 8949 and flows to Schedule D.
• Form 4797 (if rented/business use): Sales of property used for business or as a rental are usually reported on Form 4797, with any unrecaptured Section 1250 gain handled via the Schedule D worksheet.

1031 Exchanges: Investment Property Only

A 1031 like-kind exchange can defer taxes on the sale of investment real estate if you exchange into other qualifying investment property and meet strict identification and closing timelines (commonly 45/180 days). Personal-use second homes generally do not qualify. There is a narrow safe harbor for vacation homes held primarily for investment with very limited personal use—often summarized as renting enough days and keeping personal use to the greater of 14 days or 10% of days rented, for specific periods—but you must follow the revenue procedure exactly and still meet all Section 1031 rules. Talk to a qualified intermediary and CPA before you list.

How a safe-harbor vacation home typically looks

• Held for investment and rented at fair market rent (document it).
• Personal use is tightly limited (commonly framed as no more than 14 days or 10% of rental days in the relevant periods).
• Reported to the IRS on Form 8824 with the exchange details.

What Lowers Your Taxable Gain?

Your net gain is generally: sales price minus selling costs minus your adjusted basis. Track these:

• Basis increases: qualified improvements (roof, HVAC, additions), certain closing costs when you bought.
• Selling costs: brokerage fees, escrow/title fees, recording fees, and RPTT.
• Depreciation: if the property was a rental, depreciation reduces basis (increasing gain) and may trigger recapture.

Simple Nevada-Based Scenarios

Example 1: Vacation home in Dayton (no rental use)

1. Purchase price: $350,000. Improvements: $20,000 (new roof). Selling costs: $25,000.
2. Sold for $475,000. Adjusted basis ≈ $370,000. Net proceeds after selling costs ≈ $450,000.
3. Estimated gain ≈ $80,000 ($450,000 – $370,000). This is generally a long-term capital gain (federal). Nevada does not add a state income tax.

Example 2: Former rental in Sparks

1. Buy for $300,000; claim $30,000 depreciation while renting; add $10,000 improvements; sell for $420,000; pay $24,000 selling costs.
2. Adjusted basis ≈ $280,000 ($300,000 + $10,000 – $30,000). Net proceeds ≈ $396,000.
3. Total gain ≈ $116,000. Up to $30,000 may be unrecaptured Section 1250 gain (up to 25%), with the remainder at long-term capital gains rates; NIIT may apply for high-income sellers.

Timing & Record-Keeping Tips for Northern Nevada Sellers

• Hold more than one year when possible to access long-term capital gain rates.
• Keep receipts for improvements and your closing statements—these support basis and reduce taxable gain.
• Ask early about 1031 (investment property only) so timelines and escrow instructions are correct from day one.
• Verify RPTT in your county (for example, Washoe is $2.05 per $500) and remember joint buyer-seller liability under Nevada law.

Local Focus: Communities We Serve

Whether you’re selling a second home in Reno, Sparks, Carson City, Dayton, Fernley, Fallon, Minden, Genoa, Gardnerville, Moundhouse, Sun Valley, Silver Springs, Stagecoach, Silver City, Virginia City, or Verdi, our team knows the local market rhythms, county recording practices, and how to coordinate a smooth closing with title and escrow. As your Northern Nevada Realtor and Real Estate Agent resource, we focus on accurate pricing, clear timelines, and compliance with Nevada law.

What Craig Team Realty at eXp Does for Nevada Sellers

• Data-driven pricing & prep: We analyze recent sales and help you plan smart updates that protect your net—without overspending.
• Negotiation & timing: We structure terms (rent-backs, flexible closes) to fit your situation, always within Nevada law and ethical standards.
• Coordination with pros: We work closely with your CPA or tax advisor, plus escrow and title, so forms and taxes (like RPTT) are handled correctly.
• Coverage across Northern Nevada: From Reno and Sparks to Carson City, Dayton, and beyond, we’re ready to help.

Important Notes (Read This Part)

• Equal and fair service: We follow the Fair Housing Act, RESPA, Nevada NRS/NAC, the Nevada Real Estate Commission’s advertising policies, and the NAR Code of Ethics.
• Scope of information: This page is general information for Nevada sellers of second homes. It isn’t tax, legal, or accounting advice. Please consult a qualified Nevada CPA or attorney for personal guidance.

Thinking About Selling?

If you’re exploring a sale in Northern Nevada, we’re happy to walk your numbers with you, coordinate with your tax professional, and build a plan that fits your goals. Call Craig Team Realty at eXp at (775) 306-7591. Ask for Cassie Craig and the Craig Team—friendly, local, and here to help.

Quick Glossary

• Adjusted basis: Your cost plus qualified improvements and certain costs, minus any depreciation claimed.
• Capital gain: Profit when you sell for more than adjusted basis; long-term gains (held > 1 year) get special tax rates.
• Unrecaptured Section 1250 gain: Portion of gain from prior depreciation on real property, taxed up to 25%.
• NIIT: A 3.8% surtax that can apply to high-income taxpayers’ net investment income.
• RPTT: Nevada’s Real Property Transfer Tax due at recording; county recorders collect it.
• 1031 exchange: A way to defer tax when swapping one investment property for another, if timelines and rules are met.