Individual income tax subtraction for capital gains on the sale of a principal residence established.

Summary

The bill adds a new subdivision to Minnesota’s individual income tax code that treats any gain from selling a principal residence, beyond the $250,000 (single) or $500,000 (married) federal exclusion, as a subtraction from taxable income. It applies to taxpayers who sell a home that qualifies as a principal residence under IRC §121. The change takes effect for tax years starting after December 31, 2025.

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