From Inman News Features
The House of Representatives passed changes to the home-sale capital gains tax code last month in a move that aims to save tax dollars for members of the U.S. military and Foreign Services.
The Armed Forces Tax Fairness Act would allow military members on qualified active duty to extend the five-year period used to determine full exclusion of gain from the sale of a principal residence to 10 years.
“Qualified official extended duty” means any duty in excess of 90 days served at a station at least 50 miles from the military person’s principal residence, or while residing under government orders in government quarters.
Current law allows a single homeowner to exclude $250,000 or a couple to exclude $500,000 from the capital gain of the sale of a home if they resided in the home for two of the five years preceding the sale. Military members continually reassigned to areas away from their homes have a difficult time fulfilling the time requirement. The bill would allow them to ignore time spent on official duty away from home when determining the five-year period.
The Senate has to pass the final version of the bill and President Bush must sign it before it takes effect.