A bill to amend the Internal Revenue Code of 1954 to take inflation into consideration for purposes of determining an individual's gain or loss in the sale or other disposition of a principal residence.

Amends the Internal Revenue Code to provide for a cost of living adjustment in the taxpayer's basis for purposes of determining gain or loss in the sale of a principal residence. Specifies that certain improvements to a principal residence shall be treated as a separate principal residence for the purpose of determining the taxpayer's basis in such improvements.