Why is the 1997 exclusion a tax trap for long-time homeowners?

The home sale exclusion was set into law in 1997 and has never been adjusted for inflation since, so it increasingly traps long-time homeowners whose property has appreciated far beyond what the exclusion still covers. A home bought decades ago in a fast-appreciating Lowcountry market can generate a gain well past the excluded amount, leaving a longtime owner with a real tax bill they may not expect. Timing a sale around other income, or consulting a CPA about basis adjustments from past improvements, are ways to plan around this. Brian Beatty can flag this issue early for a longtime owner considering a sale.