[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1680 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1680

To amend the Internal Revenue Code of 1986 to allow a separate election 
 for each spouse under the 1-time election to exclude gain on the sale 
   or exchange of a principal residence and to increase the maximum 
exclusion to $250,000 if both a husband and wife make the election for 
                          the same residence.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 20, 1997

Mr. Weldon of Florida introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to allow a separate election 
 for each spouse under the 1-time election to exclude gain on the sale 
   or exchange of a principal residence and to increase the maximum 
exclusion to $250,000 if both a husband and wife make the election for 
                          the same residence.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Married Couples Home Sale Equity Act 
of 1997''.

SEC. 2. MODIFICATIONS TO ELECTION OF 1-TIME EXCLUSION OF GAIN FROM SALE 
              OF PRINCIPAL RESIDENCE BY INDIVIDUALS WHO HAVE ATTAINED 
              AGE 55.

    (a) Separate Elections for Each Spouse.--Paragraph (2) of section 
121(b) of the Internal Revenue Code of 1986 (relating to application to 
only 1 sale or exchange) is amended to read as follows:
            ``(2) Application to only 1 sale or exchange.--
                    ``(A) In general.--An individual may not make an 
                election under subsection (a) with respect to any sale 
                or exchange if an election by such individual under 
                subsection (a) is in effect with respect to any other 
                sale or exchange.
                    ``(B) Separate elections by husband and wife.--If--
                            ``(i) property is held by a husband and 
                        wife as joint tenants, tenants by the entirety, 
                        or community property,
                            ``(ii) such husband and wife make a joint 
                        return for the taxable year of the sale or 
                        exchange, and
                            ``(iii) the election under subsection (a) 
                        with respect to such property specifies which 
                        of such individuals is to be treated for 
                        purposes of this section as having made such 
                        election,
                then such election shall be valid with respect to both 
                such individuals but only the individual so specified 
                shall be treated for purposes of subparagraph (A) as 
                having made such election.''
    (b) Increase in Maximum Exclusion Where Both Husband and Wife Make 
Election for Same Residence.--Paragraph (1) of section 121(b) of such 
Code (relating to dollar limitation) is amended to read as follows:
            ``(1) Dollar limitation.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the amount of the gain excluded from 
                gross income under subsection (a) shall not exceed 
                $125,000.
                    ``(B) $250,000 limitation for certain married 
                individuals filing joint return.--In the case of a 
                joint return of a husband and wife each of whom--
                            ``(i) without regard to subsection (d)(1) 
                        satisfies the age, holding, and use 
                        requirements of subsection (a) with respect to 
                        the property, and
                            ``(ii) makes an election under subsection 
                        (a) with respect to a sale or exchange of such 
                        property,
                the limitation under subparagraph (A) shall be 
                $250,000.
                    ``(C) Married individuals filing separate 
                returns.--In the case of a separate return of a married 
                individual who does not make the election under 
                subsection (a) with respect to a sale or exchange, the 
                limitation under subparagraph (A) shall be--
                            ``(i) zero, or
                            ``(ii) if such individual's spouse makes 
                        such election with respect to such sale or 
                        exchange, the portion of such spouse's 
                        limitation under subparagraph (A) (but not more 
                        than $62,500) which such spouse allocates to 
                        such married individual.''
    (c) Conforming Amendment.--Subsection (c) of section 121 of such 
Code is amended by striking the last sentence.
    (d) Effective Date.--The amendments made by this section shall 
apply to sales and exchanges after the date of the enactment of this 
Act.
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