I

103D CONGRESS

2D SESSION H. R. 4612

To amend the Internal Revenue Code of 1986 to exempt gain from the

sale of a principal residence from tax.

IN THE HOUSE OF REPRESENTATIVES

JUNE 21, 1994

Mr. JOHNSTON of Florida (for himself, Mrs. THURMAN, Mr. WILSON, Mr.

FALEOMAVAEGA, Mr. CANADY, Mr. ROYCE, and Mr. LIPINSKI) 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 exempt

gain from the sale of a principal residence from tax.

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

3 SECTION 1. EXCLUSION OF GAIN FROM SALE OF PRIN4 CIPAL RESIDENCE.

5 (a) GENERAL RULE.—The section heading and sub6 section (a) of section 121 of the Internal Revenue Code

7 of 1986 are amended to read as follows:
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1 ‘‘SEC. 121. EXCLUSION OF GAIN FROM SALE OF PRINCIPAL

2 RESIDENCE BY INDIVIDUAL.

3 ‘‘(a) GENERAL RULE.—Gross income does not in4 clude gain from the sale or exchange of property if, during

5 the 5-year period ending on the date of the sale or ex6 change, such property has been owned and used by the

7 taxpayer as the taxpayer’s principal residence for periods

8 aggregating 3 years or more.’’

9 (b) CONFORMING AMENDMENTS.—

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

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

12 subsection (d) as subsection (b).

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

14 Code (as so redesignated) is amended by striking

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

16 inserting ‘‘holding and use’’.

17 (3) Paragraph (2) of section 121(b) of such

18 Code is amended to read as follows:

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

20 purposes of this section, in the case of an unmarried

21 individual whose spouse is deceased on the date of

22 the sale or exchange of property, if the deceased

23 spouse (during the 5-year period ending on the date

24 of the sale or exchange) satisfied the holding and

25 use requirements of subsection (a) with respect to

26 such property, then such individual shall be treated
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1 as satisfying the holding and use requirements of

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

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

4 Code (as so redesignated) is amended by striking

5 ‘‘subsection (a)(2)’’ each place it appears and insert6 ing ‘‘subsection (a)’’.

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

8 Code (as so redesignated) is amended by striking

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

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

11 1250(d)(7)(B), and 6012(c) of such Code are each

12 amended—

13 (A) by striking ‘‘one-time’’, and

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

15 (c) CLERICAL AMENDMENTS.—The table of sections

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

17 is amended by striking the item relating to section 121

18 and inserting the following:

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

individual.’’

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to sales and exchanges after the

21 date of the enactment of this Act.

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