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1 (November 28, 2003)

handle is hein.crs/crsaija0001 and id is 1 raw text is: Order Code RS21683 November 28, 2003 CRS Report for Congress Received through the CRS Web Military Family Tax Relief Act of 2003 Erika Lunder Legislative Attorney American Law Division Summary The Military Family Tax Relief Act of 2003, H.R. 3365, became P.L. 108-121 on November 11, 2003. The Act provides various types of tax relief to members of the Armed Forces. Additionally, the Act suspends the tax-exempt status of organizations involved in terrorist activities, offers tax relief to astronauts who die in the line of duty, and extends the authorization for certain customs user fees. The Military Family Tax Relief Act of 2003, H.R. 3365, contains a variety of measures that are primarily intended to provide tax relief to members of the Armed Forces. The House of Representatives voted unanimously in favor of the bill on October 29, 2003. The Senate passed a significantly amended version by unanimous consent on November 3 and the House unanimously approved the Senate amendments on November 5. President Bush signed the bill into law, P.L. 108-121, on November 11, 2003. Measures Providing Tax Relief to Members of the Military Expanded eligibility to exclude gain from the sale of a principal residence (sec. 101). Under section 121 of the Internal Revenue Code (IRC), an eligible taxpayer may exclude from gross income up to $250,000 ($500,000 if married filing jointly) of the gain realized from the sale of his or her principal residence. One eligibility requirement is that the taxpayer must have used the property as a principal residence for at least two of the five years preceding the date of sale. The Act amends section 121 so that a taxpayer may elect to suspend the five-year period for up to ten years during the time that the taxpayer or the taxpayer's spouse is on qualified official extended duty.1 Qualified duty is serving for more than 90 days or an indefinite period at a duty station that is at least 50 miles from the residence or while residing under orders in Government quarters. The new rule applies to sales and exchanges made after May 6, 1997. Since taxpayers are generally unable to amend returns more than three years after Congressional Research Service +** The Library of Congress 1 Members of the Foreign Service also qualify to make the election.

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