Selling Your Home: The Tax-Free Limit Frozen Since 1997

The profit on your home is tax-free up to a limit: $250,000 for a single seller, $500,000 for a married couple filing jointly. Those limits were set in 1997 and have never been raised, not even for inflation. We run the numbers on a few illustrative sales, show who already owes, explain the surviving spouse's two-year rule, and check what Congress has proposed. 0:00 Intro 1:19 A line drawn in 1997 3:33 The house grew 5:21 Two years 7:47 Who pays, by whose count 9:10 What Congress has proposed Key numbers Limits since 1997: $250,000 single · $500,000 married filing jointly (26 U.S.C. §121) Indexed to consumer prices (CPI-U, Aug 2026): about $521,776 single · $1,043,551 married Typical existing single-family home: $121,800 (1997) → $434,800 (Aug 2026, NAR) Surviving spouse: the $500,000 limit for a sale within 2 years of the death (§121(b)(4); conditions in IRS Publication 523) Bills to raise or remove the cap (H.R. 1340, S. 3332, H.R. 4327, H.R. 7034, H.R. 7131): none is law as of October 10, 2026 Examples in the video are illustrative and use 2026 federal rates. Sources Internal Revenue Code: 26 U.S.C. 121 IRS: Tax Topic 701, Sale of your home; Publication 523, Selling Your Home; Rev. Proc. 2025-32 Bureau of Labor Statistics: Consumer Price Index (CPI-U) Federal Housing Finance Agency: House Price Index National Association of Realtors: existing-home sales; Congressional Research Service: Capital Gains Tax Treatment of Home Sales Brookings / Urban-Brookings Tax Policy Center; Yale Budget Lab This channel shares general information, not tax, legal or financial advice. It is not affiliated with the IRS or any government agency. The research, script and graphics are made for this channel.