I

104TH CONGRESS

2D SESSION H. R. 3570

To amend the Internal Revenue Code of 1986 to provide that gain on

the sale of a principal residence shall be excluded from gross income

without regard to the age of the taxpayer or the amount of the gain.

IN THE HOUSE OF REPRESENTATIVES

JUNE 4, 1996

Mrs. KELLY 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 provide

that gain on the sale of a principal residence shall be

excluded from gross income without regard to the age

of the taxpayer or the amount of the gain.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Homeowners Relief

5 Act of 1996’’.
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1 SEC. 2. EXCLUSION OF GAIN FROM SALE OF PRINCIPAL

2 RESIDENCE.

3 (a) GENERAL RULE.—The section heading and sub4 section (a) of section 121 of the Internal Revenue Code

5 of 1986 are amended to read as follows:

6 ‘‘SEC. 121. EXCLUSION OF GAIN FROM SALE OF PRINCIPAL

7 RESIDENCE BY INDIVIDUAL.

8 ‘‘(a) GENERAL RULE.—Gross income does not in9 clude gain from the sale or exchange of property if, during

10 the 7-year period ending on the date of the sale or ex11 change, such property has been owned and used by the

12 taxpayer as the taxpayer’s principal residence for periods

13 aggregating 5 years or more.’’

14 (b) CONFORMING AMENDMENTS.—

15 (1) Section 121 of such Code is amended by

16 striking subsections (b) and (c) and by redesignating

17 subsection (d) as subsection (b).

18 (2) Paragraph (1) of section 121(b) of such

19 Code (as so redesignated) is amended by striking

20 ‘‘age, holding, and use’’ each place it appears and

21 inserting ‘‘holding and use’’.

22 (3) Paragraph (2) of section 121(b) (as so re23 designated) of such Code is amended to read as fol24 lows:

25 ‘‘(2) PROPERTY OF DECEASED SPOUSE.—For

26 purposes of this section, in the case of an unmarried
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1 individual whose spouse is deceased on the date of

2 the sale or exchange of property, if the deceased

3 spouse (during the 7-year period ending on the date

4 of the sale or exchange) satisfied the holding and

5 use requirements of subsection (a) with respect to

6 such property, then such individual shall be treated

7 as satisfying the holding and use requirements of

8 subsection (a) with respect to such property.’’

9 (4) Paragraph (3) of section 121(b) of such

10 Code (as so redesignated) is amended by striking

11 ‘‘subsection (a)(2)’’ each place it appears and insert12 ing ‘‘subsection (a)’’.

13 (5) Paragraph (9) of section 121(b) of such

14 Code (as so redesignated) is amended by striking

15 ‘‘subsection (a)(2)’’ and inserting ‘‘subsection (a)’’.

16 (6) Sections 1033(i)(3), 1034(l), 1038(e)(1)(A),

17 1250(d)(7)(B), and 6012(c) of such Code are each

18 amended—

19 (A) by striking ‘‘one-time’’, and

20 (B) by striking ‘‘who has attained age 55’’.

21 (c) CLERICAL AMENDMENT.—The table of sections

22 for part III of subchapter B of chapter 1 of such Code

23 is amended by striking the item relating to section 121

24 and inserting the following:

‘‘Sec. 121. Exclusion of gain from sale of principal residence by

individual.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to sales and exchanges after the

3 date of the enactment of this Act.

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