The
capital
gains
tax
is
a
federal
levy
triggered
when
someone
sells
an
asset,
such
as
a
home,
personal
property
or
investment
securities,
“for
more
than
[a
seller’s]
adjusted
basis,”
which
the


IRS
defines
as
the
original
purchase
price
of
the
item.

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.

Realtor.com,
citing
research
from
University
of
Illinois
Chicago,
claims
that
31%
of
homeowners
ages
65
and
older
exceed
the
$250,000
exclusion
limit
for
single
filers.
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.

According
to
a
July
10
release
from
Greene’s
office,
her
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,
helping
to
increase
housing
supply,
deliver
tax
relief
to
homeowners
looking
to
downsize
or
relocate
without
being
penalized
for
appreciation
[and]
protect

first-time
buyers
by
improving
inventory
and
lowering
prices
in
the
most
constrained
housing
markets.”

The
bill
would
explicitly
apply
to
individuals
selling
their
primary
residences
—
not

home
flippers
or

real
estate
investors.

“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.
My
bill
unlocks
that
equity,
helps
fix
the
housing
shortage,
and
supports
long-term
financial
security
for
American
families,”
Greene
said.

Greene
told
Realtor.com
that
homeowners
“get
penalized
so
much
[by
capital
gains
taxes]
because
of
the
large
amount
of
equity
they’ve
gained,”
and
that
the
bill’s
goal
is
to
make
it
easier
for
everyday
homeowners
to
sell
their
homes
without
losing
a
portion
of
their
profits
to
the
IRS.

Recent
reports
suggest
that
potential
capital
gains
taxes
are
making
many
homeowners
—
especially
older
ones
—
apprehensive
to
sell.

“This
would
be
the
greatest
gift
to
the

baby
boomers
ever;
they
win
again
if
this
happens.
States
like
California
and
New
York
will
benefit
if
this
passes,”

HousingWire
Lead
Analyst
Logan
Mohtashami
said.