Sponsors (7)
The bill eliminates dollar caps on the home‑sale gain exclusion, giving many sellers larger tax savings while shifting revenue burdens and increasing potential for wealth concentration and tax‑avoidance behavior.
Homeowners who sell their primary residence can exclude a larger portion (potentially all) of capital gains because the current $250K/$500K dollar caps are removed, reducing taxes owed on qualifying home sales.
Married couples and surviving spouses face simpler treatment when selling a primary residence because the special $500K surviving-spouse cap/rule is eliminated, reducing complexity for middle-class families in some cases.
Taxpayers retain existing occupancy/2‑year and nonqualified-use allocation rules, which preserves limits that discourage repeated flips and restrict converting nonqualified use into tax-free sales.
All taxpayers are likely to face larger federal deficits or reduced program funding because removing the exclusion caps reduces federal income tax revenue.
High‑income homeowners who sell very valuable primary residences will receive large tax‑free gains, concentrating after‑tax wealth and increasing inequality among taxpayers.
Taxpayers and real estate investors may be incentivized to engage in tax‑motivated property conversions or planning to claim properties as 'primary residences' to shelter large gains, increasing avoidance and compliance challenges.
Based on analysis of 2 sections of legislative text.
Removes the $250K/$500K caps so qualifying sellers can exclude unlimited gain from sale of a principal residence, effective for sales after enactment.
Official title: To amend the Internal Revenue Code of 1986 to eliminate the dollar limitations on the exclusion of gain from sales of principal residences, and for other purposes.
Introduced January 13, 2026 by Craig A. Goldman · Last progress January 13, 2026
Removes the current dollar caps on the tax exclusion for gain on the sale of a principal residence so taxpayers who meet the ownership and use tests can exclude unlimited gain when they sell their home. The remaining technical limits and nonqualified-use rules are renumbered and cross‑references updated; the change applies to sales and exchanges after enactment.