Section 121’s 1964 home-sale exclusion disproportionately aided elderly white homeowners

Evidence

That change set the stage for a series of amendments and exclusions that would transform the way homeownership affected wealth for the rest of the twentieth century. In 1964, the same year the Civil Rights Act passed, section 121 of the Internal Revenue Code was passed, allowing taxpayers aged sixty-five and up to receive 20,000 in tax-free gain from the sale of their homes regardless of whether or not they purchased a new, more expensive home. (At the time, the median home value was approximately 12,000.) Congress’s rationale was that offering a tax break only for upsizing placed a financial burden on the elderly, who might be downsizing and in need of money for retirement. Again, white homeowners were by far the greatest beneficiaries of the new rule. In 1960, almost 71 percent of white Americans between the ages of sixty-five and seventy-four owned homes. — Dorothy A. Brown, The Whiteness of Wealth, 194