The Mortgage Debt Forgiveness bill that was passed in Dec 2007 extends the exclusion of $500,000. gain for a period of two years after the death of a spouse. When is this effective? Having a tough time finding this topic. Googled and there was a page re foreclosures, etc. Help.
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SEC. 7. APPLICATION OF JOINT RETURN LIMITATION FOR CAPITAL GAINS EXCLUSION TO CERTAIN POST-MARRIAGE SALES OF PRINCIPAL RESIDENCES BY SURVIVING SPOUSES.
(a) Sale Within 2 Years of Spouse's Death- Section 121(b) of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph:
`(4) SPECIAL RULE FOR CERTAIN SALES BY SURVIVING SPOUSES- In the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting `$500,000' for `$250,000' if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.'.
(b) Effective Date- The amendment made by this section shall apply to sales or exchanges after December 31, 2007.
Comment