DeferTax Says Sellers Over 65 Are Planning Around a Capital Gains Exemption That Does Not Exist

RENO, NV – October 07, 2026 – Two bills now pending in Congress would create a larger capital gains exclusion for older homeowners selling a primary residence. Neither has passed. DeferTax, a nationwide tax deferral consultancy based in Reno, says the more immediate problem is that a significant number of sellers already believe such a rule is in force, and plan the largest transaction of their retirement around it.

What Current Law Actually Provides

Federal law currently allows a seller to exclude up to $250,000 of gain on the sale of a main home, or up to $500,000 for a married couple filing jointly, under section 121 of the Internal Revenue Code. Qualification turns on two tests set out in IRS Topic 701, an ownership test and a use test, each measured over the five years ending on the date of sale.

Neither test refers to the seller’s age. There is no separate senior exemption, no one time exclusion for older sellers, and no reduced rate that applies on reaching 65. The once in a lifetime exclusion for sellers over 55 that many homeowners remember was replaced by the current provision, which carries no age condition and no lifetime cap on how often it can be used.

The Two Bills, and Where They Stand

H.R. 9064, the Nest Egg Protection Act, was brought forward on May 29, 2026 by Representative Nicole Malliotakis of New York. It would temporarily raise the exclusion for qualifying sellers aged 65 or older, subject to a long ownership requirement. Its recorded status is introduced, the first stage of the legislative process, with committee consideration still ahead of it.

H.R. 1340, the More Homes on the Market Act, dates from February 13, 2025 and would raise the exclusion for all sellers and index it to inflation. Its status is also introduced, with no major action recorded against it.

Both remain proposals. Neither changes the treatment of any sale closing today, and neither is certain to become law.

Why the Misconception Is Expensive

The sellers most exposed to the belief are the ones least protected by the actual rule. A homeowner who has owned a property for decades in an appreciated market is the most likely to have a gain above the exclusion, and also the most likely to assume an age based provision covers it.

The exclusion amounts are fixed rather than indexed, which is the reason both bills exist. As the share of a long held gain that the exclusion covers has fallen, the untouched remainder has grown, and that remainder is ordinary taxable capital gain in the year of the sale.

“The rule people think protects them was replaced decades ago, and the part of the gain it never reached is usually the part that matters,” said Carl Worden, President and CEO of DeferTax. “What we would rather see is a seller asking what applies to the excess a year before the sale instead of a month after it, because almost everything that can be done about it has to be arranged beforehand.”

The firm’s home owner solutions page publishes the routes it uses for that remainder, including a rental conversion and a downsizing approach, each with its own qualifying conditions.

Where DeferTax Stops

DeferTax positions itself as a tax strategist rather than a tax preparer and does not file returns or provide individualized tax advice. Its about page sets out its argument that “there is a necessary professional position that is vacant in most transactions, a Tax Deferral Consultant”, and states that the firm has “helped hundreds of people”.

The firm does not comment on the likelihood of either bill passing, and says planning should be based on the law in force on the day a sale closes.

About DeferTax

DeferTax is a tax deferral consultancy based at 100 Caughlin Crossing, Reno, Nevada, working with clients across the United States. It works with homeowners selling a primary residence, real estate investors, business owners, high income earners and crypto investors, and operates DeferTax University, an education program for investors. Initial consultations are complimentary. More information is at defertax.com.

Media Contact

DeferTax Carl Worden, President and CEO carl@defertax.com 408-261-2275 https://www.defertax.com/contact-us

Media Contact
Company Name: Defer Tax
Contact Person: Media Relations
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Phone: 408-261-2275
City: Zephyr Cove
Country: United States
Website: https://defertax.com

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