Temporary increase to capital gains exclusion for sale of a primary residence by a senior

(a) In general Section 121(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (6) Special increased exclusion for sales by certain seniors during taxable years 2027 through 2030 (A) In general In the case of a sale or exchange of a qualifying residence after December 31, 2026, and before January 1, 2031— (i) in the case a qualifying senior who is not married on the date of such sale or exchange, paragraph (1) shall be applied by substituting $1,000,000 for $250,000, (ii) the case of married individuals who make a joint return for the taxable year of such sale or exchange, if either spouse is a qualifying senior, paragraphs (2) and (4) shall each be applied by substituting $1,000,000 for $500,000 each place it appears, and (iii) in the case of a qualifying senior who is married and makes a separate return for the taxable year of such sale or exchange, paragraph (1) shall be applied by substituting 500,000 for $250,000.. (B) Qualifying senior For purposes of this paragraph, the term qualifying senior means an individual who is at least 65 years old on the date of such sale or exchange. (C) Qualifying residence For purposes of this paragraph, the term qualifying residence means a principal residence that has been owned by the taxpayer (in the case of a joint return, by either spouse) for at least 25 years.. (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2026.