- 16 -
longer needed the family homestead.8 See, e.g., H. Rept. 749, 88th
Cong., 1st Sess. (1963), 1964-1 C.B. (Part 2) 125, 169-171, 284-
288; S. Rept. 830, 88th Cong., 2d Sess. (1964), 1964-1 C.B. (Part
8 In adopting this one-time exclusion provision,
Congress' intent was as follows:
The Congress believed that the taxes
imposed upon an individual with respect to
gain that he or she realizes on the sale or
exchange of his or her principal residence,
in many instances, may be unduly high,
especially in view of recent inflation
levels and the increasing cost of housing.
The Congress believed that, in most
situations, the nonrecognition provisions of
present law operate adequately to allow
individuals to move from one residence to
another without recognition of gain or
payment of tax. However, where an
individual has owned his or her principal
residence for a number of years and sells it
either to purchase a smaller, less expensive
dwelling, or to move into rental quarters,
any tax due on the gain realized may be too
high. While the provisions of prior law
relating to the exclusion of gain by
taxpayers who attained the age of 65 may
ameliorate this situation somewhat, the
Congress believed that the prior dollar
limits and age restriction were unrealistic
in view of increasing housing costs and
decreasing retirement ages. In addition,
the Congress believed that the holding
period of a principal residence which is
involuntarily converted should be tacked to
that of a replacement residence for purposes
of meeting the use and occupancy
requirements needed to qualify for the
exclusion upon a sale of the replacement
residence.
Staff of Joint Comm. on Taxation, General Explanation of the
Revenue Act of 1978, at 255-256 (J. Comm. Print 1979).
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011