Taxpayer Relief Act of 1997

Tax Issues The following is a chart outlining the changes in the Taxpayer Relief Act of 1997. TAXPAYER RELIEF ACT OF 1997
OLD RULES (REPEALED)		NEW RULES (EFFECTIVE MAY 7, 1997)
Principal Residence	Qualifying Property	Principal Residence
Any 3 of the Last 5 Years of Ownership	Length of Occupancy	Any 2 of the Last 5 Years Ownership
$125,000 (IRC§121)	Tax Exclusion or Gain	$250,000 for Individual or $500,000 for a Joint Return*
Once in a Lifetime (IRC§1034, Rollover)	Frequency of Use	Every Two Years**
55 or Older	Age of Taxpayer	No Age Restriction
Must Be Equal or Greater	Replacement Property	No Replacement Necessary Replacement Property NOT considered
No	Deduction for "Loss"	No
If one spouse has used the deduction in the prior two years, only $250,000 is available for the other spouse. Once two years have passed since the last exclusion the $500,000 would be eligible. *A pro rate portion of the exclusion is allowed if the sale is required by change in place of employment, health or other unforeseen circumstance.