This bill proposes to amend current Arizona income tax statutes by introducing a new individual income tax subtraction for net capital gains derived from the sale or exchange of a taxpayer's primary residence. Specifically, it would allow taxpayers to subtract the amount of any net capital gain included in their federal adjusted gross income (FAGI) for taxable years beginning January 1, 2027, provided that the property was their primary residence for at least five of the preceding taxable years. The current law, as outlined in section 43-1022, does not include this specific provision for primary residences. The bill's language would establish this new subtraction, thereby updating the tax code to reflect this change. The bill aims to align state tax regulations with federal provisions while providing a potential tax benefit to homeowners who sell their primary residences after meeting the specified residency requirement.

Statutes affected:
Introduced Version: 43-1022