I have a question about capital gains.

[kelly1mm]

1. The homeowner capital gain exception is limited to $250k ($500k MFJ)

on the sale of a home the taxpayer has lived in as a primary residence for at least 2 of the past 5 years. It is not a deferment (like a 1031 exchange would be) as a deferment implies that the owed taxes will be paid at some later date. It is a true exception (as in not taxed as income at all, at least for federal income tax purposes)

It also is not a one time exception but can happen over and over. In fact there is a cottage industry of people doing "slow-flips" where in they 'live' in a property they fix over a 2+ year period, sell, pocket the tax free gain, and move to the next slow flip.

Why this does not apply to other capital gains is purely (IMO) politics. Not so much that the politicians want to punish holders of other types of capital assets, but rather that there is an incentive to 'buy off' homeowners (technically home sellers).