Use the exclusion of gain on the sale of your home.

Every two years you can exclude up to $250,000 ($500,00 if you care married filing jointly) of the gain you realize on the sale or exchange of your principal residence if you meet certain tests.

Maximize your interest deduction.

You may be able to deduct points or prepaid interest in connection with a mortgage on your principal residence. You can deduct mortgage interest on the first $1 million of debt incurred to acquire, construct or substantially improve a qualified residence. Interest on $100,000 of home equity debt is also deductible, regardless of how you use the funds, but is not deductible for AMT purposes. Be careful if you refinance your mortgage debt, although the excess may qualify as home equity debt.