Time to Heal Act

This bill proposes an amendment to the Internal Revenue Code of 1986, specifically targeting the exclusion of gain from the sale of a principal residence, to provide individuals whose spouse is deceased with the same tax benefit as married couples. Its primary purpose is to allow surviving spouses to exclude a larger amount of gain from such sales, mirroring the benefit available to married filers. Under the proposed amendment, an individual with a deceased spouse can substitute "$500,000" for "$250,000" when calculating the exclusion of gain from a home sale. This special rule applies if the eligibility requirements for the exclusion were met immediately before the spouse's death and the individual has not remarried before the end of the taxable year in which the sale occurs. The legislation aims to ensure that surviving spouses are not penalized by a reduced exclusion amount due to the passage of time since their spouse's death, provided they remain unmarried, and will apply to sales and exchanges made in taxable years beginning after the date of the Act's enactment.