For Doug Painter of Los Angeles, the break was a key factor in his recent decision to sell. The 45-year-old attorney had owned a home in the Beverly Hills Post Office area since 1995, then sold in February. After closing costs, he netted around $300,000. Painter, who is single, estimated that on his income taxes he'll pay a capital gains tax on about $50,000, but $250,000 of the profit will be tax-free.

The 54-year-old attorney wanted to get back to practicing law after leaving the profession for a couple of years. With the help of his broker, Michael Ferlisi, of Baldwin Real Estate in Arcadia, [Joseph Ferrante] sold his two-bedroom condo -- purchased in 1998 for $320,000 -- for $424,000 in February. After closing costs, his tax- free profits were about $90,000.

For example, a single owner clearing $350,000 in profits on a home sale would be subject to capital gains tax on $100,000. Under the old law, taxes would be $20,000 or 20% of that gain for sellers in the top tax bracket and $10,000 or 10% in the lower two tax brackets.