New Law Allows $500,000 Tax Exclusion
Individual taxpayers now may exclude up to $250,000 ($500,000 in the case of a married couple filing a joint return) of profit realized on the sale of a principal residence.

Rollover and Over Age 55 Exclusion Rules Are Eliminated
Under the new tax law, there are no longer any requirements to roll over home sale proceeds and reinvest them into a home of equal or greater value in order to earn a tax exclusion. The Over Age 55 one-time exclusion rules have also been eliminated. (The $250,000/$500,000 tax exclusions are available without age restriction.)

Some Reporting Requirements Eliminated
The new law excludes the sale of personal residences with a gross sales price of $500,000 or less ($250,000 or less for a single seller) from the requirement to report real estate sales to the IRS.

New Benefit Available Once Every Two Years
Taxpayers who have owned and occupied a home as a principal residence for at least two of the previous five years prior to any sale or exchange can take full advantage of the exclusion. (There is a special formula provided to give partial exclusion to those who cannot satisfy the two-year requirement.)

New Law Effective Dates
The new real estate exclusions can apply to gains on sales or exchanges occurring on or after May 7, 1997.