Capital gains tax is levied when an asset is sold for more than its adjusted basis. Currently, homeowners can exclude up to $250,000 ($500,000 for joint filers) in gains, but this threshold has not changed since 1997, despite soaring home prices. Many senior homeowners are now facing substantial tax bills due to appreciation, prompting proposed legislation to eliminate this tax on primary residences. The aim is to encourage mobility, increase housing supply, and support financial stability for families, particularly for older homeowners wanting to sell without penalty.
The IRS currently allows an exclusion of up to $250,000 ($500,000 for joint filers) in capital gains from home sales. But these limits haven't been updated since 1997, when the median U.S. home price was $145,000. Today, that figure has climbed to $360,239.
This results in an average tax bill of $41,232, which is about $6,500 more than the national average, despite this group making up a smaller share of those affected.
Greene's proposal would not only eliminate the federal capital gains tax on home sales but also claims to encourage mobility by removing a key disincentive to selling.
Homeowners who have lived in their homes for decades, especially seniors in places where values have surged, shouldn't be forced to stay put because of an IRS penalty.
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