The Time to Heal Act would allow individuals whose spouses have died to claim a higher tax exclusion when selling their primary home, bringing them to the same level as married couples filing jointly. Currently, single homeowners can exclude up to $250,000 in capital gains from taxes when selling a principal residence, while married couples can exclude $500,000. Under this bill, people with deceased spouses would be eligible for the $500,000 exclusion regardless of how long ago their spouse died, as long as they meet the existing ownership and use requirements and have not remarried. The change would apply to home sales in tax years beginning after the bill's enactment, with no specific funding required since it operates through the tax code. This legislation would primarily benefit widows and widowers who are selling their homes and would have capital gains to report to the IRS.
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