REVISED RULES ON CAPITAL GAINS TAXES FOR SALES AFTER MAY 6, 1997, you can forget the old rules on rollover and exclusion of gain on the sale of a personal residence. The new tax law eliminates the need for extensive record keeping and substantially increases the amount of untaxed profit.

Under the new rules, anyone can completely exclude up to $500,000 of gain on a joint return ($250,000 if filing singly). The gain does not roll over. Since the gain does not roll over, neither do the expenses and you do not need a lifetime of records. You do not need to be 55 to take advantage of the exclusion. There are new rules and limits to watch.

You must sell your personal residence after May 6, 1997. "Sell" means settle. However, if the old rules are more favorable, you can use the old rules if you had a binding contract before that date. You can also use the old rules for the next two years if you held the property but later fail to meet the ownership and use requirements.

You must own and occupy the property as your personal residence for at least two of the five years preceding the sale. The two years do not need to be continuous so long as the total periods aggregate two years or more. You could occupy for six months each year for four years to total your two years of occupancy.

You can only use the exclusion once every two years but sales before May 7, 1997 do not count.

The new law recognizes a partial exclusion if you fail to meet the two year use and ownership requirement or if you must sell more than once in two years. For instance, if you only used the property as your personal residence for one year instead of two, you could exclude half the amount of gain. The partial exclusion is only available if you sold due to change in your place of employment, health or to the "extent provided in regulations, unforeseen circumstances." We'll have to wait for those regulations to see what "unforeseen circumstances" the IRS will accept.

Under the new law, the exclusion can be used many times (subject to the use and occupancy rules). In addition, if either spouse meets the use and ownership test, both can benefit from the exclusion.

FOR ADDITIONAL RESOURCES IRS Publication 523, "Tax Information on Selling Your Home" is available free from local IRS offices. To order, call 1-800-TAX-FORM (1-800-829-3676) or visit the IRS website at http://www.irs.ustreas.gov.