All the tax law changes above apply to the sale of business or capital assets. The most dramatic effect of the Taxpayer Relief Act of 1997 concerns the sale of a taxpayer's home. Prior to the Act, homeowners had to purchase a new home costing at least as much as their prior home to defer any capital gains on the sale of a personal residence. Homeowners now have the option to not replace a residence at all or to purchase a new home that costs less than the previous home. It cannot act as the tax or legal adviser for an exchanging taxpayer.
Any person considering a tax-deferred exchange is advised to seek independent tax and legal counsel.