You always have a silent partner to whom you owe a portion of the profits from your hard work. This silent partner, ready to cash in on your success, is known as the IRS. One of the few exceptions to the Federal Government’s requirement to pay capital gains tax on a long-term investment is on the sale of your primary residence. However, with the recent rapid appreciation in real estate values, we are more often seeing examples where homeowners are forced to pay capital gains with the sale of their property.