The tax laws may be changing.  (based on status of tax bills in House and Senate as of 11.17.17

Under current law, individuals may exclude up to $250,000 ($500,000 for married filing jointly) of gain realized on the sale or exchange of a principal residence.  The home must have been the principal residence for at least two of the last five years and can only be taken every two years.  Business or rental use of the home will reduce the total possible exemption.

Under proposed bills, the length of time of ownership and residence increases to five of the previous eight years and would only be available every five years.

The House bill, but not the Senate bill, also has a phase out based on modified adjusted gross income of $250,000 (or $500,000 for joint filers).

This change would go into effect under both bills, for sales and exchanges after 2017, with a scheduled sunset of 12/31/2025.

Disclaimer – Currently there are a lot of differences between the Senate bill and the House bill.  If the Senate passes a bill then the House and Senate will get together a small group and hammer out the differences.  The Republican leadership is really pressing to get this done prior to 12/31/17.  I’m hoping that if it is going to happen, it will be done soon enough for people to make some 2017 vs 2018 decisions.  Until that reconciliation is done, we won’t know what the exact rules will be.