US HB7400

Eliminates the current dollar limitations on capital gains exclusion for sales of a principal residence under Internal Revenue Code Section 121, allowing sellers to exclude all gain regardless of amount

Creates a new tax exclusion for gains on the sale of any residence (not just principal residences) when sold to a first-time homebuyer

Defines "first-time homebuyer" as an individual (and spouse, if married) who had no ownership interest in a principal residence during the 3-year period before the purchase date

Applies to all sales and exchanges made after the date of enactment

Introduced February 5, 2026 by Rep. Mace (R-SC) and Rep. Boebert (R-CO); referred to House Ways and Means Committee