HR 7051
American Dream Act
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- Passed House
- Passed Senate
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- Became Law
Bill overview
The American Dream Act proposes to exclude gains from the sale of a primary residence for senior citizens (age 65 or older) when the property is sold to a first-time homebuyer. The sale must meet specific criteria, including a purchase price not exceeding $500,000 and a sworn statement from the buyer confirming their status as a first-time homebuyer. This exclusion would apply to gains realized after December 31, 2026, and would expire on December 31, 2031.
Key provisions
- Excludes gains from the sale of a primary residence for taxpayers age 65 or older.
- The sale must be to a first-time homebuyer.
- The purchase price of the property cannot exceed $500,000.
- Requires a sworn statement from the buyer confirming first-time homebuyer status.
- The exclusion applies to gains realized after December 31, 2026.
- The exclusion expires on December 31, 2031.
- Defines ‘first-time homebuyer’ as someone who hasn’t owned a residence previously.
Who is affected
- Senior citizens (age 65 or older)
- First-time homebuyers
- Real estate sellers
- Taxpayers
Notable changes
- Creates a new provision (121A) in the Internal Revenue Code.
- Establishes a price limit ($500,000) for qualifying properties.
- Requires a sworn statement from the buyer to verify first-time homebuyer status.
Fiscal impact
Sponsors
Official sponsors from legislative records.
Primary sponsor
John J. McGuire
Cosponsors
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119th CONGRESS — 2d Session
H. R. 7051
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Internal Revenue Code of 1986 to exclude from gross income gains on the sale of real property to first-time homebuyers by individuals who have attained age 65.
This Act may be cited as the American Dream Act
.
the taxpayer (either spouse in the case of a joint return) has attained age 65 as of the date of such sale,
such sale is to a first-time homebuyer for use as such first-time homebuyer’s principal residence (within the meaning of section 121),
the price at which such real property is sold does not exceed $500,000, and
the closing documents with respect to such sale include a statement by the buyer made under penalty of perjury that such buyer is a first-time homebuyer and is purchasing such property for use as such buyer’s principal residence (within the meaning of section 121).
first-time homebuyermeans any individual if such individual, or such individual’s spouse, has not had a present ownership interest in a principal residence (within the meaning of section 121) at any time prior to the date of the sale to which this section applies.
Section 121 shall not apply to any sale to which subsection (a) applies.
This section shall not apply to any sale after December 31, 2031.