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.

Plain-English Summary

This bill would change the federal tax rules around selling your home. Under current law, when you sell your primary residence, you can exclude up to $250,000 in profit from your taxable income (or up to $500,000 if you are married filing jointly). This means you only pay capital gains taxes on profits above those amounts. This bill would remove those dollar caps entirely, meaning homeowners could exclude all of the profit from the sale of their primary residence from federal taxes, no matter how large that profit is.

The bill would primarily affect homeowners who sell their primary residence at a significant profit — particularly those in high-cost housing markets where home values have risen sharply over time. Under current rules, a homeowner who bought a house decades ago and sells it for a large gain might owe taxes on the portion of profit exceeding the existing limits. If this bill passes, those homeowners would no longer owe federal capital gains taxes on any of that profit, as long as the home was their primary residence.

It is worth noting that existing eligibility requirements — such as living in the home for at least two of the five years before the sale — would likely still apply. The bill has been referred to the House Committee on Ways and Means, which handles tax-related legislation, and has not yet advanced further in the legislative process.