Radon Gas Tax Relief Act of 1988

Radon Gas Tax Relief Act of 1988 - Amends the Internal Revenue Code to permit a 40 percent nonrefundable income tax credit of up to $4,000 for expenditures made for radon testing in or below the taxpayer's principal residence and for the installation of property designed to reduce radon levels inside the residence.

Permits an income tax deduction (both individual and corporate) for radon prevention expenditures in connection with: (1) the development of real property; (2) the construction or enlargement of any building or dwelling unit; or (3) a dwelling required to be purchased by the taxpayer under a contract with an employer covering employee relocation services (the deductible expenses must be incurred by the taxpayer-employee).

Makes the tax credit and the tax deduction mutually exclusive with respect to the same expenditures.

Amends Federal law to make funds available for the reimbursement of Federal employees for radon protection expenditures necessary to overcome a substantial obstacle to the salability of a principal residence being sold in conjunction with a transfer to a new location.