Capital gains are the profit from selling an asset for more than its cost basis, taxed under federal rules that differ depending on how long the asset was held. A primary residence owned and lived in for two of the last five years can exclude a large portion of the gain. This is a federal tax concept and does not change from state to state.
Why it matters
What you owe on a sale depends on your basis and how the house was used, not just the sale price.
General information, not legal or tax advice.