Gain on Sale of Primary Residence

New Tax Implications

On July 30, 2008, President George W. Bush signed the Housing Assistance Tax Act of 2008 (H.R. 3221). The act includes $15.1 billion in tax incentives in an effort to help rejuvenate the slumping U.S. economy. In addition to the incentives, the act contains a number of provisions designed to make the bill revenue-neutral. While tax preparers should become familiar with all provisions of the bill, professionals preparing income tax returns and taxpayers contemplating the sale of a personal residence should pay particular attention to section 3092, the “Reduced Home Sale Exclusion,” under IRC section 121.

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