When I was on the buying side of real estate, the families I bought from almost never knew their own numbers. They knew what they paid for the house thirty years ago. They knew roughly what it might sell for. What they did not know was the gap in the middle, the part the government takes, and that gap is exactly where a lot of money quietly disappears.
I think about that every time a new tax proposal makes the news, because the headline is never the real story. The real story is what families do, or do not do, with the time they have before they sell. This week gave us a fresh example.
A bill landed in Congress that would hand senior home sellers a much bigger tax break. It is getting a lot of attention, and it should. But the most useful thing I can tell you about it has nothing to do with whether it passes. It has to do with the one number most families never run until it is too late.
What the Nest Egg Protection Act Actually Does
On June 11, 2026, Representative Nicole Malliotakis introduced the Nest Egg Protection Act, filed as H.R. 9064. The bill would temporarily raise the capital gains exclusion on a primary home sale to $1 million for homeowners who are 65 and older and who have owned that home for at least 25 years. If it became law, the higher exclusion would apply to tax years 2027 through 2030.
To understand why that matters, you have to understand the rule it would change. Under current law, when you sell your primary residence, you can exclude up to $250,000 of the gain from federal capital gains tax if you are single, or up to $500,000 if you are married filing jointly. Anything above that gets taxed.
Here is the part that surprises people. That $250,000 and $500,000 figure has not been raised since 1997. Almost thirty years. Home values have climbed for decades while the exclusion sat frozen, and the result is that a tax break originally designed for everyday homeowners now catches a lot of ordinary families who never thought of themselves as wealthy.
The National Association of Realtors has reported that about 34% of homeowners, roughly 29 million households, could already owe capital gains tax based on the equity they have built above the exclusion cap. NAR projects that number could climb to nearly 70% of homeowners by 2035 if the cap stays where it is. So this is not a niche problem for the rich. It is a slow-moving math problem that reaches more families every year the threshold stays still.
One thing I want to be very clear about, because I have watched families make decisions on news that was not final. The Nest Egg Protection Act is a proposed bill. It has been introduced, not passed. It is not law. It would only run for four tax years even if it does pass, and it has a long road through Congress first. Nobody should sell a house, or refuse to sell a house, based on a bill that may never make it to the President's desk.
Why This Number Hits Senior Families the Hardest
Let me put real figures on it, because that is how this becomes concrete.
Say your parents bought their home in 1990 for $120,000. It is a modest place. They raised a family in it. Today it is worth $600,000, which is not unusual in a lot of markets after three decades. That is a gain of $480,000.
If your mom is widowed and selling as a single owner, she can exclude $250,000 of that gain. The remaining $230,000 is subject to capital gains tax. Depending on her income and her state, that can be a five-figure tax bill, sometimes a large one, landing in the middle of a year that is already hard enough.
Now here is what I saw over and over on the buying side. Nobody had run that number. The family knew the house would sell for around $600,000, and in their heads, $600,000 was the number going into the next chapter. The tax was a gut punch that arrived after the decision was already made, when there was nothing left to do about it.
That is the trap. Not the tax itself. The surprise. A tax you planned for is a line item. A tax you did not see coming is a crisis.
What Families Should Actually Do, Bill or No Bill
This is the part that matters, and it does not depend on Congress at all. If a home sale is anywhere on your family's horizon, here is how to take the surprise out of it.
Run the net proceeds math a year out
Do not wait until you are sitting across from a closing agent. A year ahead of any likely sale, sit down and figure out the real number. Start with the likely sale price. Subtract the mortgage payoff if there is one. Subtract selling costs, which usually run 7 to 9 percent once you count commissions and concessions. Then estimate the capital gains tax on the portion of the gain above the exclusion. What is left is what your family actually keeps, and it is almost always lower than the number in everyone's head.
Find your parents' true cost basis
The taxable gain is the sale price minus the cost basis, and most families calculate basis wrong by leaving money on the table. Basis is not just the purchase price. It includes major capital improvements over the years: the new roof, the addition, the kitchen remodel, the HVAC system. Dig up those records. Every documented improvement raises the basis and lowers the taxable gain. I have seen families cut their tax bill meaningfully just by finding old receipts in a drawer.
Understand the widow's window
If one spouse has passed, there are timing rules that matter. A surviving spouse can often still use the full $500,000 exclusion if the home is sold within two years of the spouse's death, instead of the $250,000 single limit. That two-year window can be worth tens of thousands of dollars, and a lot of families miss it simply because nobody told them the clock was running.
Talk to a tax professional before you list, not after
I am a real estate broker, not a CPA, and I will say plainly that this is the one place where a couple hundred dollars of professional advice can save thousands. A tax pro can model the actual bill, flag the basis adjustments, and time the sale around things like income years and the widow's window. Get that conversation done before the house hits the market.
Know all seven ways to sell before you pick one
The tax is only one piece. How you sell changes the whole outcome. Most families know one path: call an agent and list it. There are actually seven, including a traditional listing, for sale by owner, a legitimate cash buyer, a wholesaler, owner financing, a lease-option, and an as-is investor sale. Each fits a different situation. The "we buy houses" letter in the mailbox is offering you one specific path, the wholesale path, and it is usually the worst one for your family's equity. Know all seven before you let anyone rush you into one.
The Bigger Point About Leverage
I have watched two kinds of families sell a parent's home.
The first kind starts early. They run the numbers a year out. They know the tax, the basis, the net proceeds, and the options. When an offer comes in, or a "we buy houses" postcard shows up, they can look at it clearly because they already know what the house is worth and what they want. They have leverage.
The second kind waits for the forcing event. A fall. A hospital discharge that cannot go home. A sudden cannot-live-here-anymore moment. Then everything happens at once, under pressure, and they take whatever is in front of them because there is no time to do anything else. They have no leverage, and it costs them.
A bill like the Nest Egg Protection Act might eventually give some families a bigger cushion on the tax. I hope it moves the conversation forward. But the families who win at this are not the ones waiting on Congress. They are the ones who did the boring work early, while they still had time and choices.
Boring beats broke. Every time.
Frequently Asked Questions
How much capital gains tax will my parents owe when they sell their home?
It depends on the gain above the exclusion. A single owner can exclude $250,000 of gain and a married couple can exclude $500,000. The portion above that is taxed at long-term capital gains rates, which depend on income and can range up to 20 percent federally, plus any state tax. Run the specific numbers with a tax professional before listing.
Is the Nest Egg Protection Act law yet?
No. It was introduced in Congress on June 11, 2026 as H.R. 9064. It is a proposed bill, not law. If it passes, the higher $1 million exclusion would apply only to tax years 2027 through 2030 and only to owners 65 and older who have held the home at least 25 years. Do not plan a sale around a bill that has not passed.
What counts toward my parents' cost basis?
Cost basis starts with the original purchase price and includes major capital improvements over the years, such as additions, a new roof, a remodel, or a new HVAC system. Routine repairs do not count, but documented improvements do, and they lower the taxable gain. Gather those records before calculating the tax.
My father passed away. Can my mother still use the $500,000 exclusion?
Often yes, if she sells within two years of his death and meets the other requirements. This is sometimes called the widow's or widower's window. It can be worth a significant amount, so confirm the timing with a tax professional quickly rather than letting the window close.
Should we just take a cash offer to avoid the hassle?
Be careful. A "we buy houses" cash offer is usually a wholesale offer, which is one of seven ways to sell and typically the lowest-value one for your family. Avoiding hassle is reasonable, but find out what the home is actually worth first, and compare all your options before signing anything.
About Ryan Riggins
Ryan Riggins is a senior transition advisor and former house flipper. After 8+ years buying homes from families in transition, he walked away from the cash-buyer side to help families avoid the $50K mistakes he used to profit from. Based in Greensboro, NC. NC Real Estate License #361546, eXp Realty. Founder of Riggins Strategic Solutions and the SeniorSafe app.
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Ryan Riggins is the founder of Riggins Strategic Solutions, a consumer protection company for families navigating senior transitions. He spent 8 years in construction project management and house flipping before switching sides. Two books on Amazon. Free resources at rigginsstrategicsolutions.com.
