I sold a house and don't understand the question on capital gains?

Which specific question do you not understand?

You can generally exclude gain (up to $250,000 or $500,000 if married filing jointly) if you have lived in and used the house as your primary residence for the last two out of five years leading up to the sale.

You won't pay taxes on the first $250,000 (also known as a capital gain) you make from the sale of your home. If you file jointly, you won't pay taxes on the first $500,000.

That income is free and clear as long as:

• You owned the home.
• It was your main home for two years or more within the five years leading up to the sale.
• You waited at least two years between selling your primary home and excluding your first $250,000 or $500,000 from taxes. In other words, you may buy and sell as many primary homes as you'd like, but you'll only get this tax benefit every two years.

E.g., If your capital gain was say $300,000 (filing single), then your capital gain will be $300,000 - $250,000 = $50,000.  You would only pay tax on that $50,000 gain.