Bill > HF4000

This bill establishes a new tax subtraction for individuals in Minnesota, allowing them to reduce their taxable income by the amount of capital gains realized from selling their principal residence that exceeds the limits set by federal law. Specifically, it refers to Section 121 of the Internal Revenue Code, which allows individuals to exclude up to $250,000 (or $500,000 for married couples filing jointly) of profit from the sale of their main home from their taxable income. This bill provides a state-level subtraction for any gain above those federal thresholds, meaning that any capital gain on the sale of a principal residence that is still subject to taxation after applying the federal exclusion will now be deductible from Minnesota income tax. A "principal residence" is defined as a property that qualifies for the federal exclusion under Section 121 of the Internal Revenue Code. This provision is set to take effect for taxable years beginning after December 31, 2025.

Budget and Finance

https://www.revisor.mn.gov/bills/94/2026/0/HF/4000/