This corruption-enabled big-wet-kiss to their REIC masters, passed by the Republican Congress and stupidly signed by Clinton on August 5, 1997, kicked off the housing bubble. Which of course has now led to the housing crash, and the destruction of the entire worldwide financial system.
Ah, ya gotta love unintended consequences. You gotta love NAR and NAHB congressional bribe money. And ya gotta love it when the corrupt monkeys in DC do something so fricking stupid, just because it "felt good" at the time (if ya know what I mean...).
Congress needs to repeal the cap-gains exclusion on home sales, and tax them just like all other cap gains. Or just junk the entire tax code (and IRS) and go with a Fair Tax. But of course, with our current corrupted Congress that won't happen, since their REIC masters just LOVE this stupid law and the mortgage interest deduction.
Taxpayer Relief Act of 1997
The law exempts from taxation profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles. To qualify, sellers must have owned and used the home as their principal residence for at least two of the last five years before the sale. Effective for sales after May 6, 1997, this new provision replaces the prior rollover provision on home sales and the $125,000 exclusion of gain for those 55 and over. There was no change in the rule that prohibits taxpayers from deducting losses on home sales.