Eligible home sellers would have tax-free profit limits tied to inflation

Eligible home sellers would be allowed to exclude profits from federal income tax up to the applicable limit. The limits would be $500,000 or $1 million for eligible sales or exchanges of a person's main home. Sellers would need to meet the eligibility rules for the main-home tax exclusion. The applicable limit would depend on those tax rules. The limits would apply to sales and exchanges after the bill becomes law.

The dollar limits would adjust with inflation each year. The formula would cover both the $500,000 and $1 million limits. The calculation would use 2023 as its base year. Any increase would round down to the nearest $100. The inflation calculation would apply for tax years beginning after 2024, with the amendments applying to sales and exchanges after enactment.