Posted: Oct 11, 2005 By: Denise Brakefield

Subject: Tax Reform Suggestion

Comment: In addition to reducing the mortgage interest
limitation may I suggest the panel consider
reinstituting the one-time only capital gains exclusion
on a principle residence. The recent change, allowing continuous capital gain exclusions on
a residence occupied for two of the previous five years has resulted in inflation of home
prices and avoidance of customary capital gains
taxes - making real estate the only tax free
investment. Homes in "hot markets" are now
too expensive for the vast majority of residents. The capital gain avoidance clause is responsible for this imbalance.