What This Bill Does
This bill amends tax law to increase how much profit you can exclude from taxes when you sell your main home. The bill is called the "More Homes on the Market Act" and makes changes to the Internal Revenue Code of 1986.
Who It Affects
People who sell their principal residence (main home).
Key Provisions
• The tax exclusion amount increases from $250,000 to $500,000 for certain taxpayers (Sec. 2(a)(1)).
• The tax exclusion amount increases from $500,000 to $1,000,000 for certain taxpayers (Sec. 2(a)(2)).
• Starting in tax years after 2023, the $500,000 and $1,000,000 exclusion amounts will automatically increase each year based on cost-of-living adjustments, rounded down to the nearest $100 (Sec. 2(a)(4)).
What Changes
If you sell your principal residence, you can exclude more money from your taxable income. This means you may owe less in federal income taxes on the profit from the sale. The new exclusion amounts apply to home sales and exchanges that happen after this bill becomes law.
Important Definitions
• Principal residence: Your main home
• Cost-of-living adjustment: An automatic increase based on inflation to account for rising prices
Effective Date
Sales and exchanges of principal residences that occur after the date this bill becomes law.
I
118TH CONGRESS
1ST SESSION H. R. 1321
To amend the Internal Revenue Code of 1986 to increase the exclusion
of gain from the sale of a principal residence, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 1, 2023
Mr. PANETTA (for himself and Mr. KELLY of Pennsylvania) introduced the
following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to increase
the exclusion of gain from the sale of a principal resi-
dence, and for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘More Homes on the
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Market Act’’.
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SEC. 2. INCREASE OF EXCLUSION OF GAIN FROM SALE OF
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PRINCIPAL RESIDENCE.
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(a) IN GENERAL.—Section 121(b) of the Internal
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Revenue Code of 1986 is amended—
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•HR 1321 IH
(1) by striking ‘‘$250,000’’ and inserting
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‘‘$500,000’’ each place it appears,
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(2) by striking ‘‘500,000’’ and inserting
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‘‘$1,000,000’’ each place it appears,
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(3) in paragraph (2)(A), in the heading, by
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striking ‘‘$500,000’’ and inserting ‘‘$1,000,000’’, and
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(4) by adding at the end the following new
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paragraph:
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‘‘(5) ADJUSTMENT
FOR
INFLATION.—In the
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case of a taxable year beginning after 2023, the
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$500,000 and $1,000,000 amounts in paragraphs
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(1), (2), and (4) shall be increased by an amount
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equal to—
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‘‘(A) such dollar amount, multiplied by
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‘‘(B) the cost-of-living adjustment deter-
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mined under section 1(f)(3) for the calendar
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year in which the taxable year begins, deter-
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mined by substituting ‘2022’ for ‘2016’ in sub-
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paragraph (A)(ii) thereof.
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If any increase under this clause is not a multiple
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of $100, such increase shall be rounded to the next
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lowest multiple of $100.’’.
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•HR 1321 IH
(b) EFFECTIVE DATE.—The amendments made by
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this section shall apply to sales and exchanges after the
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date of the enactment of this Act.
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Æ
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