SUMMARY
This Idea Brief proposes the creation of a temporary capital loss deduction for home sales to help families cope with the collapse of home values.
Home prices have declined at staggering rates, and a growing number of homeowners have been forced to sell their homes at a loss. As a result, these homeowners have seen a once-trusted asset turn into a financial liability, delivering another hit to middle class family finances. While current law provides capital gains tax relief for homes sold at a profit, there is no provision to cushion the economic blow sale losses.
This Idea Brief proposes the creation of a temporary capital loss tax deduction for home sales that would allow homeowners to recoup some of their home investment and make it easier to sell property in order to pursue economic opportunities in other parts of the country.
