(MONEY Magazine) – THIS MONTH:

--Now brokers want to sell no-load funds. --Meet the IRS' taxpayer advocate. --How I turned my idea into an $8 million business

Bill Clinton and Bob Dole may not agree on much, but they both want to help American homeowners. To do that--and win votes--the presidential candidates have pushed proposals to eliminate capital-gains taxes on the sale of virtually all primary residences. Says Grant Thornton partner Tom Ochsenschlager: "These proposals turn your home into a giant municipal bond with a roof." Because this type of tax break has broad, bipartisan support and a modest (by Washington standards) price tag of $233 million or less a year, some version of it has a good chance of becoming law in 1997. That means it's time to change the way you think about your home.

Generally, under current law, if you are under age 55, you must roll over any gains on the sale of a principal residence into another home of equal or greater value within two years of the sale, or pay capital-gains taxes on the profits. This fact alone nearly compels you to keep trading up into bigger houses, even when you don't need (or want) the extra space. At 55, you finally get a break. You and your spouse are eligible for a one-time capital-gains-tax exclusion of up to $125,000 on your sales profits. Still, throughout your life, you must keep boxloads of documents and bills detailing all of your home improvements to calculate your eventual taxes.

Clinton and Dole want to eliminate all that. Under Clinton's plan, couples who have lived in their home for only two years could exclude as much as $500,000 in gains starting Jan. 1, 1997; singles could escape taxes on up to $250,000. Under Dole's more restrictive plan, anyone who has lived in a home for at least three of the past five years could duck taxes on gains of up to $250,000. For those who lived in their homes for 10 or more years, the exclusion would increase by $25,000 a year--to a maximum of $500,000 after 20 years. Any gains over that sum would be taxed at a top rate of 28% under Clinton, 14% under Dole.

Record keeping under both proposals would surely be easier. But even if legislation is passed, homeowners would have to keep documentation of their purchase price and improvements during the first two years they owned their home under Clinton's plan or the first three years under Dole's.

Housing analysts think these tax reforms could shift prices as well. Chief economist Mark Zandi of Regional Financial Associates in West Chester, Pa. says that as many couples with grown children clamor to trade down, prices could soften for big houses in the suburbs and tighten for downtown two-bedroom condos that go for $95,000 to $250,000 now in many major cities.

While it's premature to make big moves based on the proposals, once the cap-gains change becomes law, you may want to consider these shrewd moves:

--Trade down, if you're an empty-nester. Take the case of someone under 55 with hefty housing appreciation. Under current law, if you sold your home and did not reinvest the gains trading up, the feds would tax your gains at a top rate of 28%. Add to that state and sometime local levies, and the effective tax rate can approach 35%. Under the Clinton plan, however, 99% of homeowners would pay no federal taxes. The states would likely go along with this change. So you could buy a smaller, less expensive home, or rent, and use the gains to invest for the future.

--Weigh a job transfer to a less expensive locale. Imagine your boss asking you to move from Los Angeles next year to a better job with the company in Portland, Ore., where the cost of living is 9% lower. Today, to avoid capital-gains taxes on your home, you'd probably have to buy a bigger house in Oregon, perhaps much larger than you want. Under the Clinton and Dole plans, you could sell your L.A. house, buy a cheaper Portland spread and avoid taxes altogether.

--Don't worry about paying taxes on the house if you get divorced. Typically when couples split, one spouse takes the house, the other gets the equivalent in cash. But blood pressure often rises over how to value the property before the spouse with the house sells and may be liable for capital-gains taxes. In the future, taxes shouldn't be a factor. Says Cathleen Quinn Nolan, president of the Long Island Board of Realtors: "These plans will make life a lot easier in the midst of a personal crisis." You can fight about something else instead.