| The Mortgage Forgiveness Act of 2007 passed by Congress on December 18, provides that the $500,000 exclusion of gain from the sale of a principal residence will be available to a surviving spouse. This new law is effective for sales after December 31, 2007. The sale by the surviving spouse must occur within two years after the deceased spouse's death. Without this law change, a surviving spouse would have the $250,000 gain exclusion allowed to single taxpayers.
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