American Dream Act

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 121 the following new section:

In the case of an individual, gross income shall not include gain from the sale of real property if—

(1) the taxpayer (either spouse in the case of a joint return) has attained age 65 as of the date of such sale,

(2) such sale is to a first-time homebuyer for use as such first-time homebuyer’s principal residence (within the meaning of section 121),

(3) the price at which such real property is sold does not exceed $500,000, and

(4) 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).

For purposes of this section, the term first-time homebuyer means 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.

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 121 the following new item:

The amendments made by this section shall apply to sales after December 31, 2026, in taxable years ending after such date.