New Bill Proposes $1 Million Capital Gains Tax Exclusion for Those Over Age 65
“A Republican lawmaker is proposing a major tax break for some homeowners, arguing that outdated tax rules are preventing many older adults from selling homes they’ve owned for decades.
The “Nest Egg Protection Act” would temporarily increase the federal capital gains tax exclusion to $1 million for qualifying homeowners age 65 and older who sell their primary residence.
Under current law, homeowners can exclude up to $250,000 in gains from the sale of a primary residence, while married couples filing jointly can exclude up to $500,000.
But… those thresholds were established in 1997 and haven’t been indexed for inflation, despite increases in home values over the past three decades.
The bill’s sponsor, Rep. Nicole Malliotakis of New York, says many older Americans are effectively trapped in homes that no longer meet their needs because selling could trigger a significant tax bill.
“By removing this tax barrier that discourages seniors from selling when they want to, we can protect their nest egg while making the American Dream of homeownership more attainable for younger families and first-time homebuyers,” Malliotakis said in a release announcing the legislation.”