Sponsors (7)
The bill lets homeowners exclude much larger home‑sale gains and simplifies spousal treatment while keeping occupancy limits, but does so at the likely cost of substantial federal revenue loss, greater benefits for wealthier homeowners, and increased incentives for tax avoidance.
Homeowners selling their primary residence can exclude more (potentially all) capital gains because the $250,000/$500,000 exclusion caps are removed.
Married couples and surviving spouses are no longer constrained by the special $500,000/surviving‑spouse rule, simplifying tax treatment for many sellers.
Maintains the existing 2‑year occupancy and nonqualified‑use allocation rules, preserving limits on repeated flips and nonqualified periods.
Removing the exclusion caps reduces federal income tax revenue, which could increase deficits, reduce funding for programs, or lead to higher taxes elsewhere.
High‑income homeowners selling valuable primary residences would receive large tax‑free gains, increasing after‑tax inequality.
Could encourage tax‑motivated property transactions or efforts to reclassify investment properties as 'primary' residences to avoid tax, raising risks of abuse and enforcement costs.
Based on analysis of 2 sections of legislative text.
Eliminates the $250,000/$500,000 caps on the federal exclusion of gain from the sale of a principal residence, leaving qualifying gains fully excludable subject to existing use and nonqualified‑use rules.
Introduced January 13, 2026 by Craig A. Goldman · Last progress January 13, 2026
Removes the $250,000 (single) and $500,000 (joint) dollar caps on the federal tax exclusion for gain from the sale of a principal residence, so qualifying gains may be excluded without a fixed dollar limit. The bill keeps the existing rules about ownership/use (the 2‑year rule) and rules on nonqualified use, and makes conforming renumbering edits to the law. The change applies to sales and exchanges after enactment.