Time to Heal Act
Summary
What This Bill Does
The Time to Heal Act changes the Internal Revenue Code section 121 home-sale exclusion for widowed homeowners. For a sale or exchange in taxable years beginning after enactment, an individual whose spouse is deceased on the sale date can apply the $500,000 exclusion rather than the $250,000 exclusion if the couple met the joint-return home-sale requirements immediately before the spouse's death and the surviving spouse has not remarried before the end of the taxable year of sale. The bill removes the practical pressure to sell quickly after a spouse dies merely to preserve the larger exclusion.
Who Benefits and How
Surviving spouses, widowed homeowners, estate-planning advisors, and families settling housing after a death benefit because more home-sale gain can be excluded from federal tax even if the sale occurs later. Homeowners in high-appreciation housing markets gain the most because the additional $250,000 exclusion can prevent or reduce capital-gains tax.
Who Bears the Burden and How
The IRS must administer the revised eligibility rule, and federal taxpayers bear reduced revenue from a larger exclusion for qualifying surviving spouses. Widowed sellers must document that section 121 joint-sale requirements were met immediately before death and that they did not remarry before the end of the sale year.
Key Provisions
- Raises the home-sale exclusion for qualifying unmarried surviving spouses from $250,000 to $500,000.
- Requires the section 121 joint-return eligibility requirements to have been met immediately before the spouse's death.
- Requires the surviving spouse not to have remarried before the end of the taxable year in which the home is sold.
- Applies the rule to sales and exchanges in taxable years beginning after enactment.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Lets an unmarried surviving spouse use the full $500,000 joint-return home-sale capital-gains exclusion for qualifying sales after a spouse's death, instead of dropping to the $250,000 single filer exclusion.
Key Policy Areas
Tax, Housing, Families
Primary Purpose
Lets an unmarried surviving spouse use the full $500,000 joint-return home-sale capital-gains exclusion for qualifying sales after a spouse's death, instead of dropping to the $250,000 single filer exclusion.
Policy Domains
Substantive provisions
Identified Gains
- Surviving spouses
- Widowed homeowners
- Estate planning advisors
- Families settling housing
Identified Costs
- IRS
- Federal taxpayers
- Widowed sellers
Sponsors
Legislative Progress
In CommitteeReferred to the House Committee on Ways and Means.
Introduced in House
Mr. Barrett introduced the following bill; which was referred to …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
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