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HR 5720 IHRHCommentsClose CommentsPermalink

110th CONGRESS 2d Session H. R. 5720

To amend the Internal Revenue Code of 1986 to provide assistance for housing.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVES

April 8, 2008

Mr. RANGEL (for himself, Mr. MCDERMOTT, Mr. LEWIS of Georgia, Mr. POMEROY, Mr. THOMPSON of California, Mr. EMANUEL, Mr. BLUMENAUER, Ms. BERKLEY, Mr. CROWLEY, Mr. ELLISON, Ms. GIFFORDS, Mr. JOHNSON of Georgia, Mr. MAHONEY of Florida, Mr. RODRIGUEZ, Ms. SHEA-PORTER, Mr. SIRES, Mr. WELCH of Vermont, and Mrs. JONES of Ohio) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

A BILL

To amend the Internal Revenue Code of 1986 to provide assistance for housing.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; ETC.

(a) Short Title- This Act may be cited as the `Housing Assistance Tax Act of 2008'. CommentsClose CommentsPermalink





(b) Amendment of 1986 Code- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. CommentsClose CommentsPermalink





(c) Table of Contents- The table of contents of this Act is as follows: CommentsClose CommentsPermalink





Sec. 1. Short title; etc. CommentsClose CommentsPermalink

TITLE I--HOUSING TAX INCENTIVES

Subtitle A--Multi-Family Housing

Part 1--Low-Income Housing Tax Credit

Sec. 101. Temporary increase in volume cap for low-income housing tax credit. CommentsClose CommentsPermalink





Sec. 102. Determination of credit rate. CommentsClose CommentsPermalink





Sec. 103. Modifications to definition of eligible basis. CommentsClose CommentsPermalink





Sec. 104. Other simplification and reform of low-income housing tax incentives. CommentsClose CommentsPermalink

Part 2--Modifications to Tax-Exempt Housing Bond Rules

Sec. 111. Recycling of tax-exempt debt for financing residential rental projects. CommentsClose CommentsPermalink





Sec. 112. Coordination of certain rules applicable to low-income housing credit and qualified residential rental project exempt facility bonds. CommentsClose CommentsPermalink

Part 3--Reforms Related to the Low-Income Housing Credit and Tax-Exempt Housing Bonds

Sec. 121. Hold harmless for reductions in area median gross income. CommentsClose CommentsPermalink





Sec. 122. Exception to annual current income determination requirement where determination not relevant. CommentsClose CommentsPermalink

Subtitle B--Single Family Housing

Sec. 131. First-time homebuyer credit. CommentsClose CommentsPermalink





Sec. 132. Additional standard deduction for real property taxes for nonitemizers. CommentsClose CommentsPermalink

Subtitle C--General Provisions

Sec. 141. Temporary liberalization of tax-exempt housing bond rules. CommentsClose CommentsPermalink





Sec. 142. Repeal of alternative minimum tax limitations on tax-exempt housing bonds, low-income housing tax credit, and rehabilitation credit. CommentsClose CommentsPermalink





Sec. 143. Bonds guaranteed by Federal home loan banks eligible for treatment as tax-exempt bonds. CommentsClose CommentsPermalink





Sec. 144. Modification of rules pertaining to FIRPTA nonforeign affidavits. CommentsClose CommentsPermalink





Sec. 145. Modification of definition of tax-exempt use property for purposes of the rehabilitation credit. CommentsClose CommentsPermalink

TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

Subtitle A--Foreign Currency and Other Qualified Activities

Sec. 201. Revisions to REIT income tests. CommentsClose CommentsPermalink





Sec. 202. Revisions to REIT asset tests. CommentsClose CommentsPermalink





Sec. 203. Conforming foreign currency revisions. CommentsClose CommentsPermalink

Subtitle B--Taxable REIT Subsidiaries

Sec. 211. Conforming taxable REIT subsidiary asset test. CommentsClose CommentsPermalink

Subtitle C--Dealer Sales

Sec. 221. Holding period under safe harbor. CommentsClose CommentsPermalink





Sec. 222. Determining value of sales under safe harbor. CommentsClose CommentsPermalink

Subtitle D--Health Care REITs

Sec. 231. Conformity for health care facilities. CommentsClose CommentsPermalink

Subtitle E--Effective Dates

Sec. 241. Effective dates. CommentsClose CommentsPermalink

TITLE III--REVENUE PROVISIONS

Sec. 301. Broker reporting of customer's basis in securities transactions. CommentsClose CommentsPermalink





Sec. 302. Delay in application of worldwide allocation of interest. CommentsClose CommentsPermalink





Sec. 303. Time for payment of corporate estimated taxes. CommentsClose CommentsPermalink

TITLE I--HOUSING TAX INCENTIVES

Subtitle A--Multi-Family Housing

PART 1--LOW-INCOME HOUSING TAX CREDIT

SEC. 101. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX CREDIT.

Paragraph (3) of section 42(h) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(I) INCREASE IN STATE HOUSING CREDIT CEILING FOR 2008 AND 2009- In the case of calendar years 2008 and 2009, the dollar amount in effect under subparagraph (C)(ii)(I) for such calendar year (after any increase under subparagraph (H)) shall be increased by $0.20.'. CommentsClose CommentsPermalink

SEC. 102. DETERMINATION OF CREDIT RATE.

(a) Elimination of Distinction Between New and Existing Buildings; Minimum Credit Rate for Non-Federally Subsidized Buildings- CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (b) section 42 is amended to read as follows: CommentsClose CommentsPermalink





`(b) Applicable Percentage- For purposes of this section-- CommentsClose CommentsPermalink





`(1) IN GENERAL- The term `applicable percentage' means, with respect to any building, the appropriate percentage prescribed by the Secretary for the earlier of-- CommentsClose CommentsPermalink





`(A) the month in which such building is placed in service, or CommentsClose CommentsPermalink





`(B) at the election of the taxpayer-- CommentsClose CommentsPermalink





`(i) the month in which the taxpayer and the housing credit agency enter into an agreement with respect to such building (which is binding on such agency, the taxpayer, and all successors in interest) as to the housing credit dollar amount to be allocated to such building, or CommentsClose CommentsPermalink





`(ii) in the case of any building to which subsection (h)(4)(B) applies, the month in which the tax-exempt obligations are issued. CommentsClose CommentsPermalink





A month may be elected under clause (ii) only if the election is made not later than the 5th day after the close of such month. Such an election, once made, shall be irrevocable. CommentsClose CommentsPermalink





`(2) METHOD OF PRESCRIBING PERCENTAGES- CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of paragraph (1), the percentages prescribed by the Secretary for any month shall be-- CommentsClose CommentsPermalink





`(i) in the case of any building which is not federally subsidized for the taxable year, the greater of-- CommentsClose CommentsPermalink





`(I) 9 percentthe average percentage determined under subclause (II) for months in the preceding calendar year, or CommentsClose CommentsPermalink





`(II) the percentage which will yield over a 10-year period amounts of credit under subsection (a) which have a present value equal to 70 percent of the qualified basis of such building, and CommentsClose CommentsPermalink





`(ii) in the case of any other building, the percentage which will yield over a 10-year period amounts of credit under subsection (a) which have a present value equal to 30 percent of the qualified basis of such building. CommentsClose CommentsPermalink





`(B) METHOD OF DISCOUNTING- The present value under subparagraph (A) shall be determined-- CommentsClose CommentsPermalink





`(i) as of the last day of the 1st year of the 10-year period referred to in subparagraph (A), CommentsClose CommentsPermalink





`(ii) by using a discount rate equal to 72 percent of the average of the annual Federal mid-term rate and the annual Federal long-term rate applicable under section 1274(d)(1) to the month applicable under subparagraph (A) and compounded annually, and CommentsClose CommentsPermalink





`(iii) by assuming that the credit allowable under this section for any year is received on the last day of such year. CommentsClose CommentsPermalink





`(3) CROSS REFERENCES- CommentsClose CommentsPermalink





`(A) For treatment of certain rehabilitation expenditures as separate buildings, see subsection (e). CommentsClose CommentsPermalink





`(B) For determination of applicable percentage for increases in qualified basis after the 1st year of the credit period, see subsection (f)(3). CommentsClose CommentsPermalink





`(C) For authority of housing credit agency to limit applicable percentage and qualified basis which may be taken into account under this section with respect to any building, see subsection (h)(7).'. CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS- CommentsClose CommentsPermalink





(A) Subparagraph (B) of section 42(e)(3) is amended by striking `subsection (b)(2)(B)(ii)' and inserting `subsection (b)(2)(A)(ii)'. CommentsClose CommentsPermalink





(B) Subparagraph (A) of section 42(i)(2) is amended by striking `new building' and inserting `building'. CommentsClose CommentsPermalink





(b) Modifications to Definition of Federally Subsidized Building- CommentsClose CommentsPermalink





(1) IN GENERAL- Subparagraph (A) of section 42(i)(2) is amended by striking `, or any below market Federal loan,'. CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS- CommentsClose CommentsPermalink





(A) Subparagraph (B) of section 42(i)(2) is amended-- CommentsClose CommentsPermalink





(i) by striking `BALANCE OF LOAN OR' in the heading thereof, CommentsClose CommentsPermalink





(ii) by striking `loan or' in the matter preceding clause (i), and CommentsClose CommentsPermalink





(iii) by striking `subsection (d)--' and all that follows and inserting `subsection (d) the proceeds of such obligation.'. CommentsClose CommentsPermalink





(B) Subparagraph (C) of section 42(i)(2) is amended-- CommentsClose CommentsPermalink





(i) by striking `or below market Federal loan' in the matter preceding clause (i), CommentsClose CommentsPermalink





(ii) in clause (i)-- CommentsClose CommentsPermalink





(I) by striking `or loan (when issued or made)' and inserting `(when issued)', and CommentsClose CommentsPermalink





(II) by striking `the proceeds of such obligation or loan' and inserting `the proceeds of such obligation', and CommentsClose CommentsPermalink





(iii) by striking `, and such loan is repaid,' in clause (ii). CommentsClose CommentsPermalink





(C) Paragraph (2) of section 42(i) is amended by striking subparagraphs (D) and (E). CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this subsection shall apply to buildings placed in service after the date of the enactment of this Act. CommentsClose CommentsPermalink

SEC. 103. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

(a) Increase in Credit for Certain State Designated Buildings- Subparagraph (C) of section 42(d)(5) (relating to increase in credit for buildings in high cost areas), before redesignation under subsection (df), is amended by adding at the end the following new clause: CommentsClose CommentsPermalink





`(v) BUILDINGS DESIGNATED BY STATE HOUSING CREDIT AGENCY- Any building which is designated by the State housing credit agency as requiring the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified low-income housing project shall be treated for purposes of this subparagraph as located in a difficult development area which is designated for purposes of this subparagraph. The preceding sentence shall not apply to any building if paragraph (1) of subsection (h) does not apply to any portion of the eligible basis of such building by reason of paragraph (4) of such subsection.'. CommentsClose CommentsPermalink





(b) Modification to Rehabilitation Requirements- CommentsClose CommentsPermalink





(1) IN GENERAL- Clause (ii) of section 42(e)(3)(A) is amended-- CommentsClose CommentsPermalink





(A) by striking `10 percent' in subclause (I) and inserting `20 percent', and CommentsClose CommentsPermalink





(B) by striking `$3,000' in subclause (II) and inserting `$6,000'. CommentsClose CommentsPermalink





(2) INFLATION ADJUSTMENT- Paragraph (3) of section 42(e) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(D) INFLATION ADJUSTMENT- In the case of any expenditures which are treated under paragraph (4) as placed in service during any calendar year after 2009, the $6,000 amount in subparagraph (A)(ii)(II) shall be increased by an amount equal to-- CommentsClose CommentsPermalink





`(i) such dollar amount, multiplied by CommentsClose CommentsPermalink





`(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2008' for `calendar year 1992' in subparagraph (B) thereof. CommentsClose CommentsPermalink





Any increase under the preceding sentence which is not a multiple of $100 shall be rounded to the nearest multiple of $100.'. CommentsClose CommentsPermalink





(3) CONFORMING AMENDMENT- Subclause (II) of section 42(f)(5)(B)(ii) is amended by striking `if subsection (e)(3)(A)(ii)(II)' and all that follows and inserting `if the dollar amount in effect under subsection (e)(3)(A)(ii)(II) were two-thirds of such amount.'. CommentsClose CommentsPermalink





(c) Increase in Allowable Community Service Facility Space for Small Projects- Clause (ii) of section 42(d)(4)(C) (relating to limitation) is amended by striking `10 percent of the eligible basis of the qualified low-income housing project of which it is a part. For purposes of' and inserting `the sum of-- CommentsClose CommentsPermalink





`(I) 15 percent of so much of the eligible basis of the qualified low-income housing project of which it is a part as does not exceed $5,000,000, plus CommentsClose CommentsPermalink





`(II) 10 percent of so much of the eligible basis of such project as is not taken into account under subclause (I). CommentsClose CommentsPermalink





For purposes of'. CommentsClose CommentsPermalink





(d) Clarification of Treatment of Federal Grants- Subparagraph (A) of section 42(d)(5) is amended to read as follows: CommentsClose CommentsPermalink





`(A) FEDERAL GRANTS NOT TAKEN INTO ACCOUNT IN DETERMINING ELIGIBLE BASIS- The eligible basis of a building shall not include any costs financed directly or indirectly with the proceeds of a Federally funded grant.'. CommentsClose CommentsPermalink





(e) Simplification of Related Party Rules- Clause (iii) of section 42(d)(2)(D), before redesignation under subsection (f)(2), is amended-- CommentsClose CommentsPermalink





(1) by striking all that precedes subclause (II), CommentsClose CommentsPermalink





(2) by redesignating subclause (II) as clause (iii) and moving such clause two ems to the left, and CommentsClose CommentsPermalink





(3) by striking the last sentence thereof. CommentsClose CommentsPermalink





(f) Repeal of Deadwood- CommentsClose CommentsPermalink





(1) Clause (ii) of section 42(d)(2)(B) is amended by striking `the later of--' and all that follows and inserting `the date the building was last placed in service,'. CommentsClose CommentsPermalink





(2) Subparagraph (D) of section 42(d)(2) is amended by striking clause (i) and by redesignating clauses (ii) and (iii) as clauses (i) and (ii), respectively. CommentsClose CommentsPermalink





(3) Paragraph (5) of section 42(d) is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B). CommentsClose CommentsPermalink





(g) Effective Date- The amendments made by this subsection shall apply to buildings placed in service after the date of the enactment of this Act. CommentsClose CommentsPermalink

SEC. 104. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX INCENTIVES.

(a) Repeal Prohibition on Moderate Rehabilitation Assistance- Paragraph (2) of section 42(c) (defining qualified low-income building) is amended by striking the flush sentence at the end. CommentsClose CommentsPermalink





(b) Modification of Time Limit for Incurring 10 Percent of Project's Cost- Clause (ii) of section 42(h)(1)(E) is amended by striking `(as of the later of the date which is 6 months after the date that the allocation was made or the close of the calendar year in which the allocation is made)' and inserting `(as of the date which is 1 year after the date that the allocation was made)'. CommentsClose CommentsPermalink





(c) Repeal of Bonding Requirement on Disposition of Building- Paragraph (6) of section 42(j) (relating to no recapture on disposition of building (or interest therein) where bond posted) is amended to read as follows: CommentsClose CommentsPermalink





`(6) NO RECAPTURE ON DISPOSITION OF BUILDING WHICH CONTINUES IN QUALIFIED USE- CommentsClose CommentsPermalink





`(A) IN GENERAL- The increase in tax under this subsection shall not apply solely by reason of the disposition of a building (or an interest therein) if it is reasonably expected that such building will continue to be operated as a qualified low-income building for the remaining compliance period with respect to such building. CommentsClose CommentsPermalink





`(B) STATUTE OF LIMITATIONS- If a building (or an interest therein) is disposed of during any taxable year and there is any reduction in the qualified basis of such building which results in an increase in tax under this subsection for such taxable or any subsequent taxable year, then-- CommentsClose CommentsPermalink





`(i) the statutory period for the assessment of any deficiency with respect to such increase in tax shall not expire before the expiration of 3 years from the date the Secretary is notified by the taxpayer (in such manner as the Secretary may prescribe) of such reduction in qualified basis, and CommentsClose CommentsPermalink





`(ii) such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment.'. CommentsClose CommentsPermalink





(d) Energy Efficiency and Historic Nature Taken Into Account in Making Allocations- Subparagraph (C) of section 42(m)(1) (relating to plans for allocation of credit among projects) is amended by striking `and' at the end of clause (vii), by striking the period at the end of clause (viii), and by adding at the end the following new and inserting a comma, and by adding at the end the following new clauses: CommentsClose CommentsPermalink





`(ix) the energy efficiency of the project, and CommentsClose CommentsPermalink





`(x) the historic nature of the project.'. CommentsClose CommentsPermalink





(e) Continued Eligibility for Students Who Received Foster Care Assistance- Clause (i) of section 42(i)(3)(D) is amended by striking `or' at the end of subclause (I), by redesignating subclause (II) as subclause (III), and by inserting after subclause (I) the following new subclause: CommentsClose CommentsPermalink





`(II) a student who was previously under the care and placement responsibility of the State agency responsible for administering a plan under part B or part E of title IV of the Social Security Act, or'. CommentsClose CommentsPermalink





(f) Treatment of Rural Projects- Section 42(i) (relating to definitions and special rules) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(8) TREATMENT OF RURAL PROJECTS- For purposes of this section, in the case of any project for residential rental property located in a rural area (as defined in section 520 of the Housing Act of 1949), any income limitation measured by reference to area median gross income shall be measured by reference to the greater of area median gross income or national non-metropolitan median income. The preceding sentence shall not apply with respect to any building if paragraph (1) of section 42(h) does not apply by reason of paragraph (4) thereof to any portion of the credit determined under this section with respect to such building.'. CommentsClose CommentsPermalink





(g) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to buildings placed in service after the date of the enactment of this Act. CommentsClose CommentsPermalink





(2) REPEAL OF BONDING REQUIREMENT ON DISPOSITION OF BUILDING- The amendment made by subsection (c) shall apply to-- CommentsClose CommentsPermalink





(A) interests in buildings disposed after the date of the enactment of this Act, and CommentsClose CommentsPermalink





(B) interests in buildings disposed of on or before such date if-- CommentsClose CommentsPermalink





(i) it is reasonably expected that such building will continue to be operated as a qualified low-income building (within the meaning of section 42 of the Internal Revenue Code of 1986) for the remaining compliance period (within the meaning of such section) with respect to such building, and CommentsClose CommentsPermalink





(ii) the taxpayer elects the application of this subparagraph with respect to such disposition. CommentsClose CommentsPermalink





Notwithstanding the preceding sentence, the amendments made by subsection (c) shall not apply to any disposition after the date 5 years after the date of the enactment of this Act. CommentsClose CommentsPermalink





(3) ENERGY EFFICIENCY AND HISTORIC NATURE TAKEN INTO ACCOUNT IN MAKING ALLOCATIONS- The amendments made by subsection (d) shall apply to allocations made after December 31, 2008. CommentsClose CommentsPermalink





(4) CONTINUED ELIGIBILITY FOR STUDENTS WHO RECEIVED FOSTER CARE ASSISTANCE- The amendments made by subsection (e) shall apply to determinations made after the date of the enactment of this Act. CommentsClose CommentsPermalink





(5) TREATMENT OF RURAL PROJECTS- The amendment made by subsection (f) shall apply to determinations made after the date of the enactment of this Act. CommentsClose CommentsPermalink

PART 2--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

SEC. 111. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL PROJECTS.

(a) In General- Subsection (i) of section 146 (relating to treatment of refunding issues) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(6) TREATMENT OF CERTAIN RESIDENTIAL RENTAL PROJECT BONDS AS REFUNDING BONDS IRRESPECTIVE OF OBLIGOR- CommentsClose CommentsPermalink





`(A) IN GENERAL- If, during the 6-month period beginning on the date of a repayment of a loan financed by an issue 95 percent or more of the net proceeds of which are used to provide projects described in section 142(d), such repayment is used to provide a new loan for any project so described, any bond which is issued to refinance such issue shall be treated as a refunding issue to the extent the principal amount of such refunding issue does not exceed the principal amount of the bonds refunded. CommentsClose CommentsPermalink





`(B) LIMITATIONS- Subparagraph (A) shall apply to only one refunding of the original issue and only if-- CommentsClose CommentsPermalink





`(i) the refunding issue is issued not later than 4 years after the date on which the original issue was issued, CommentsClose CommentsPermalink





`(ii) the latest maturity date of any bond of the refunding issue is not later than 34 years after the date on which the refunded bond was issued, and CommentsClose CommentsPermalink





`(iii) the refunding issue is approved in accordance with section 147(f) before the issuance of the refunding issue.'. CommentsClose CommentsPermalink





(b) Low-Income Housing Credit- Clause (ii) of section 42(h)(4)(A) is amended by inserting `or such financing is refunded as described in section 146(i)(6)' before the period at the end. CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to repayments of loans received after the date of the enactment of this Act. CommentsClose CommentsPermalink

SEC. 112. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL PROJECT EXEMPT FACILITY BONDS.

(a) Determination of Next Available Unit- Paragraph (3) of section 142(d) (relating to current income determinations) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(C) EXCEPTION FOR PROJECTS WITH RESPECT TO WHICH AFFORDABLE HOUSING CREDIT IS ALLOWED- In the case of a project with respect to which credit is allowed under section 42, the second sentence of subparagraph (B) shall be applied by substituting `building (within the meaning of section 42)' for `project'.'. CommentsClose CommentsPermalink





(b) Students- Paragraph (2) of section 142(d) (relating to definitions and special rules) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(C) STUDENTS- Rules similar to the rules of 42(i)(3)(D) shall apply for purposes of this subsection.'. CommentsClose CommentsPermalink





(c) Single-Room Occupancy Units- Paragraph (2) of section 142(d) (relating to definitions and special rules), as amended by this Actsubsection (b), is further amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(D) SINGLE-ROOM OCCUPANCY UNITS- A unit shall not fail to be treated as a residential unit merely because such unit is a single-room occupancy unit (within the meaning of section 42).'. CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to determinations of the status of qualified residential rental projects for periods beginning after the date of the enactment of this Act, with respect to bonds issued before, on, or after such date. CommentsClose CommentsPermalink

PART 3--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-EXEMPT HOUSING BONDS

SEC. 121. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.

(a) In General- Paragraph (2) of section 142(d) is, as amended by section 112, is further amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(CE) HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME- CommentsClose CommentsPermalink





`(i) IN GENERAL- Any determination of area median gross income under subparagraph (B) with respect to any project for any calendar year after 2008 shall not be less than the area median gross income determined under such subparagraph with respect to such project for the calendar year preceding the calendar year for which such determination is made. CommentsClose CommentsPermalink





`(ii) SPECIAL RULE FOR CERTAIN CENSUS CHANGES- In the case of a HUD hold harmless impacted project, the area median gross income with respect to such project for any calendar year after 2008 (hereafter in this clause referred to as the current calendar year) shall be the greater of the amount determined without regard to this clause or the sum of-- CommentsClose CommentsPermalink





`(I) the area median gross income determined under the HUD hold harmless policy with respect to such project for calendar year 2008, plus CommentsClose CommentsPermalink





`(II) any increase in the area median gross income determined under subparagraph (B) (determined without regard to the HUD hold harmless policy and this subparagraph) with respect to such project for the current calendar year over the area median gross income (as so determined) with respect to such project for calendar year 2008. CommentsClose CommentsPermalink





`(iii) HUD HOLD HARMLESS POLICY- The term `HUD hold harmless policy' means the regulations under which a policy similar to the rules of clause (i) applied to prevent a change in the method of determining area median gross income from resulting in a reduction in the area median gross income determined with respect to certain projects in calendar years 2007 and 2008. CommentsClose CommentsPermalink





`(iv) HUD HOLD HARMLESS IMPACTED PROJECT- The term `HUD hold harmless impacted project' means any project with respect to which area median gross income was determined under subparagraph (B) for calendar year 2007 or 2008 if such determination would have been less but for the HUD hold harmless policy.'. CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to determinations of area median gross income for calendar years after 2008. CommentsClose CommentsPermalink

SEC. 122. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT WHERE DETERMINATION NOT RELEVANT.

(a) In General- Subparagraph (A) of section 142(d)(3) is amended by adding at the end the following new sentence: `The preceding sentence shall not apply with respect to any project for any year if during such year no residential unit in the project is occupied by a new resident whose income exceeds the applicable income limit.'(b). CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to years ending after the date of the enactment of this Act. CommentsClose CommentsPermalink

Subtitle B--Single Family Housing

SEC. 131. FIRST-TIME HOMEBUYER CREDIT.

(a) In General- Subpart C of part IV of subchapter A of chapter 1 is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section: CommentsClose CommentsPermalink

`SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

`(a) Allowance of Credit- In the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence. CommentsClose CommentsPermalink





`(b) Limitations- CommentsClose CommentsPermalink





`(1) DOLLAR LIMITATION- CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $7,500. CommentsClose CommentsPermalink





`(B) MARRIED INDIVIDUALS FILING SEPARATELY- In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting `$3,750' for `$7,500'. CommentsClose CommentsPermalink





`(C) OTHER INDIVIDUALS- If two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $7,500. CommentsClose CommentsPermalink





`(2) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME- CommentsClose CommentsPermalink





`(A) IN GENERAL- The amount allowable as a credit under subsection (a) (determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so allowable as-- CommentsClose CommentsPermalink





`(i) the excess (if any) of-- CommentsClose CommentsPermalink





`(I) the taxpayer's modified adjusted gross income for such taxable year, over CommentsClose CommentsPermalink





`(II) $70,000 ($1140,000 in the case of a joint return), bears to CommentsClose CommentsPermalink





`(ii) $20,000. CommentsClose CommentsPermalink





`(B) MODIFIED ADJUSTED GROSS INCOME- For purposes of subparagraph (A), the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. CommentsClose CommentsPermalink





`(c) Definitions- For purposes of this section-- CommentsClose CommentsPermalink





`(1) FIRST-TIME HOMEBUYER- The term `first-time homebuyer' means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies. CommentsClose CommentsPermalink





`(2) PRINCIPAL RESIDENCE- The term `principal residence' has the same meaning as when used in section 121. CommentsClose CommentsPermalink





`(3) PURCHASE- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `purchase' means any acquisition, but only if-- CommentsClose CommentsPermalink





`(i) the property is not acquired from a person related to the person acquiring it, and CommentsClose CommentsPermalink





`(ii) the basis of the property in the hands of the person acquiring it is not determined-- CommentsClose CommentsPermalink





`(I) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or CommentsClose CommentsPermalink





`(II) under section 1014(a) (relating to property acquired from a decedent). CommentsClose CommentsPermalink





`(B) CONSTRUCTION- A residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence. CommentsClose CommentsPermalink





`(4) PURCHASE PRICE- The term `purchase price' means the adjusted basis of the principal residence on the date such residence is purchased. CommentsClose CommentsPermalink





`(5) RELATED PERSONS- A person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants). CommentsClose CommentsPermalink





`(d) Exceptions- No credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if-- CommentsClose CommentsPermalink





`(1) a credit under section 1400C (relating to first-time homebuyer in the District of Columbia) is allowable to the taxpayer (or the taxpayer's spouse) for such taxable year or any prior taxable year, CommentsClose CommentsPermalink





`(2) the residence is financed by the proceeds of a qualified mortgage issue the interest on which is exempt from tax under section 103, CommentsClose CommentsPermalink





`(3) the taxpayer is a nonresident alien, or CommentsClose CommentsPermalink





`(4) the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer's spouse)) before the close of such taxable year. CommentsClose CommentsPermalink





`(e) Reporting- If the Secretary requires information reporting under section 6045 by a person described in subsection (e)(2) thereof to verify the eligibility of taxpayers for the credit allowable by this section, the exception provided by section 6045(e) shall not apply. CommentsClose CommentsPermalink





`(f) Recapture of Credit- CommentsClose CommentsPermalink





`(1) IN GENERAL- Except as otherwise provided in this subsection, if a credit under subsection (a) is allowed to a taxpayer, the tax imposed by this chapter shall be increased by 6 2/3 percent of the amount of such credit for each taxable year in the recapture period. CommentsClose CommentsPermalink





`(2) ACCELERATION OF RECAPTURE- If a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection (a) (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer's spouse)) before the end of the recapture period-- CommentsClose CommentsPermalink





`(A) the tax imposed by this chapter for the taxable year of such disposition or cessation, shall be increased by the excess of the amount of the credit allowed over the amounts of tax imposed by paragraph (1) for preceding taxable years, and CommentsClose CommentsPermalink





`(B) paragraph (1) shall not apply with respect to such credit for such taxable year or any subsequent taxable year. CommentsClose CommentsPermalink





`(3) LIMITATION BASED ON GAIN- In the case of the sale of the principal residence to a person who is not related to the taxpayer, the increase in tax determined under paragraph (2) shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection (a) to the extent not previously recaptured under paragraph (1). CommentsClose CommentsPermalink





`(4) EXCEPTIONS- CommentsClose CommentsPermalink





`(A) DEATH OF TAXPAYER- Paragraphs (1) and (2) shall not apply to any taxable year ending after the date of the taxpayer's death. CommentsClose CommentsPermalink





`(B) INVOLUNTARY CONVERSION- Paragraph (2) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (2). Paragraph (2) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence. CommentsClose CommentsPermalink





`(C) TRANSFERS BETWEEN SPOUSES OR INCIDENT TO DIVORCE- In the case of a transfer of a residence to which section 1041(a) applies-- CommentsClose CommentsPermalink





`(i) paragraph (2) shall not apply to such transfer, and CommentsClose CommentsPermalink





`(ii) in the case of taxable years ending after such transfer, paragraphs (1) and (2) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor). CommentsClose CommentsPermalink





`(5) JOINT RETURNS- In the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection. CommentsClose CommentsPermalink





`(6) RECAPTURE PERIOD- For purposes of this subsection, the term `recapture period' means the 15 taxable years beginning with the second taxable year following the taxable year in which the purchase of the principal residence for which a credit is allowed under subsection (a) was made. CommentsClose CommentsPermalink





`(g) Application of Section- This section shall only apply to a principal residence purchased by the taxpayer after XXon or after April 9, 2008, and before April 1, 2009.'. CommentsClose CommentsPermalink





(b) Conforming Amendments- CommentsClose CommentsPermalink





(1) Section 26(b)(2) is amended by striking `and' at the end of subparagraph (U), by striking the period and inserting `, and' and the end of subparagraph (V), and by inserting after subparagraph (V) the following new subparagraph: CommentsClose CommentsPermalink





`(W) section 36(f) (relating to recapture of homebuyer credit).'. CommentsClose CommentsPermalink





(2) Section 6211(b)(4)(A) is amended by striking ` and 35,' and inserting `34,' and all that follows through `6428' and inserting `34, 35, 36,'.(3) 53(e), and 6428'. CommentsClose CommentsPermalink





(3)Section 1324(b)(2) of title 31, United States Code, is amended by inserting `, 36,' after `section 35'. CommentsClose CommentsPermalink





(4) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by redesignating the item relating to section 36 as an item relating to section 37 and by inserting before such item the following new item: CommentsClose CommentsPermalink





`Sec. 36. First-time homebuyer credit.'. CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to XXresidences purchased on or after April 9, 2008, in taxable years ending on or after such date. CommentsClose CommentsPermalink

SEC. 132. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR NONITEMIZERS.

(a) In General- Section 63(c)(1) (defining standard deduction) is amended by striking `and' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and', and by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(C) in the case of any taxable year beginning in 2008, the real property tax deduction.'. CommentsClose CommentsPermalink





(b) Definition- Section 63(c) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(87) REAL PROPERTY TAX DEDUCTION- For purposes of paragraph (1), the real property tax deduction is so much of the amount ofthe lesser of-- CommentsClose CommentsPermalink





`(A) the amount allowable as a deduction under this chapter for State and local real property taxes (within the meaning of section 164) paid or accrued by the taxpayer during the taxable year which do not exceedtaxes described in section 164(a)(1), or CommentsClose CommentsPermalink





`(B) $350 ($700 in the case of a joint return). CommentsClose CommentsPermalink





'.(c) Any taxes taken into account under section 62(a) shall not be taken into account under this paragraph.'. CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007. CommentsClose CommentsPermalink

Subtitle C--General Provisions

SEC. 141. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.

(a) Temporary Increase in Volume Cap- CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (d) of section 146 is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(5) INCREASE AND SET ASIDE FOR HOUSING BONDS FOR 2008- CommentsClose CommentsPermalink





`(A) INCREASE FOR 2008- In the case of calendar year 2008, the State ceiling for each State shall be increased by an amount equal to $10,000,000,000 multiplied by a fraction-- CommentsClose CommentsPermalink





`(i) the numerator of which is the population of such State, and CommentsClose CommentsPermalink





`(ii) the denominator of which is the total population of all States. CommentsClose CommentsPermalink





`(B) SET ASIDE- CommentsClose CommentsPermalink





`(i) IN GENERAL- Any amount of the State ceiling for any State which is attributable to an increase under this paragraph shall be allocated solely for one or more qualified housing issues. CommentsClose CommentsPermalink





`(ii) QUALIFIED HOUSING ISSUE- For purposes of this paragraph, the term `qualified housing issue' means-- CommentsClose CommentsPermalink





`(I) an issue described in section 142(a)(7) (relating to qualified residential rental projects), or CommentsClose CommentsPermalink





`(II) a qualified mortgage issue (determined by substituting `12-month period' for `42-month period' each place it appears in section 143(a)(2)(D)(i)).'. CommentsClose CommentsPermalink





(2) CARRYFORWARD OF UNUSED LIMITATIONS- Subsection (f) of section 146 is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(6) SPECIAL RULES FOR INCREASED VOLUME CAP UNDER SUBSECTION (d)(5)- No amount which is attributable to the increase under subsection (d)(5) may be used-- CommentsClose CommentsPermalink





`(A) for any issue other than a qualified housing issue (as defined in subsection (d)(5)), or CommentsClose CommentsPermalink





`(B) to issue any bond after calendar year 2010.'. CommentsClose CommentsPermalink





(b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for Subprime Refinancing Loans- CommentsClose CommentsPermalink





(1) IN GENERAL- Section 143(k) (relating to other definitions and special rules) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(12) SPECIAL RULES FOR SUBPRIME REFINANCINGS- CommentsClose CommentsPermalink





`(A) IN GENERAL- Notwithstanding the requirements of subsection (i)(1), the proceeds of a qualified mortgage issue may be used to refinance a mortgage on a residence which was originally financed by the mortgagor through a qualified subprime loan. CommentsClose CommentsPermalink





`(B) SPECIAL RULES- In applying subparagraph (A) to any refinancing-- CommentsClose CommentsPermalink





`(i) subsection (a)(2)(D)(i) shall be applied by substituting `12-month period' for `42-month period' each place it appears, CommentsClose CommentsPermalink





`(ii) subsection (d) (relating to 3-year requirement) shall not apply, and CommentsClose CommentsPermalink





`(iii) subsection (e) (relating to purchase price requirement) shall be applied by using the market value of the residence at the time of refinancing in lieu of the acquisition cost. CommentsClose CommentsPermalink





`(C) QUALIFIED SUBPRIME LOAN- The term `qualified subprime loan' means an adjustable rate single-family residential mortgage loan made after December 31, 2001, and before January 1, 2008, that the bond issuer determines would be reasonably likely to cause financial hardship to the borrower if not refinanced. CommentsClose CommentsPermalink





`(D) TERMINATION- This paragraph shall not apply to any bonds issued after December 31, 2010.'. CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act. CommentsClose CommentsPermalink

SEC. 142. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND REHABILITATION CREDIT.

(a) Tax-Exempt Interest on Certain Housing Bonds Exempted From Alternative Minimum Tax- CommentsClose CommentsPermalink





(1) IN GENERAL- Subparagraph (C) of section 57(a)(5) (relating to specified private activity bonds) is amended by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively, and by inserting after clause (ii) the following new clause: CommentsClose CommentsPermalink





`(iii) EXCEPTION FOR CERTAIN HOUSING BONDS- For purposes of clause (i), the term `private activity bond' shall not include any bond issued after the date of the enactment of this clause if such bond is-- CommentsClose CommentsPermalink





`(I) an exempt facility bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide qualified residential rental projects (as defined in section 142(d)), CommentsClose CommentsPermalink





`(II) a qualified mortgage bond (as defined in section 143(a)), or CommentsClose CommentsPermalink





`(III) a qualified veterans' mortgage bond (as defined in section 143(b)). CommentsClose CommentsPermalink





The preceding sentence shall not apply to any refunding bond unless such preceding sentence applied to the refunded bond (or in the case of a series of refundings, the original bond).'. CommentsClose CommentsPermalink





(2) NO ADJUSTMENT TO ADJUSTED CURRENT EARNINGS- Subparagraph (B) of section 56(g)(4) is amended by adding at the end the following new clause: CommentsClose CommentsPermalink





`(iii) TAX EXEMPT INTEREST ON CERTAIN HOUSING BONDS- Clause (i) shall not apply in the case of any interest on a bond to which section 57(a)(5)(C)(iii) applies.'. CommentsClose CommentsPermalink





(b) Allowance of Low-Income Housing Credit Against Alternative Minimum Tax- Subparagraph (B) of section 38(c)(4) (relating to specified credits) is amended by redesignating clauses (ii) through (iv) as clauses (iii) through (v) and inserting after clause (i) the following new clause: CommentsClose CommentsPermalink





`(ii) the credit determined under section 42 to the extent attributable to buildings placed in service after December 31, 2007,'. CommentsClose CommentsPermalink





(c) Allowance of Rehabilitation Credit Against Alternative Minimum Tax- Subparagraph (B) of section 38(c)(4), as amended by subsection (b), is amended by striking `and' at the end of clause (iv), by redesignating clause (v) as clause (vi), and by inserting after clause (iv) the following new clause: CommentsClose CommentsPermalink





`(v) the credit determined under section 47 to the extent attributable to qualified rehabilitation expenditures properly taken into account for periods after December 31, 2007, and'. CommentsClose CommentsPermalink





(d) Effective Date- CommentsClose CommentsPermalink





(1) HOUSING BONDS- The amendments made by subsection (a) shall apply to bonds issued after the date of the enactment of this Act. CommentsClose CommentsPermalink





(2) LOW INCOME HOUSING CREDIT- The amendments made by subsection (b) shall apply to credits determined under section 42 of the Internal Revenue Code of 1986 to the extent attributable to buildings placed in service after December 31, 2007. CommentsClose CommentsPermalink





(3) REHABILITATION CREDIT- The amendments made by subsection (c) shall apply to credits determined under section 47 of the Internal Revenue Code of 1986 to the extent attributable to qualified rehabilitation expenditures properly taken into account for periods after December 31, 2007. CommentsClose CommentsPermalink

SEC. 143. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR TREATMENT AS TAX-EXEMPT BONDS.

(a) In General- Subparagraph (A) of section 149(b)(3) of the Internal Revenue Code of 1986 (relating to exceptions for certain insurance programs) is amended by striking `or' at the end of clause (ii), by striking the period at the end of clause (iii) and inserting `, or' and by adding at the end the following new clause: CommentsClose CommentsPermalink





`(iv) any guarantee by a Federal home loan bank made in connection with the original issuance of a bond during the period beginning on the date of the enactment of this Act and ending on December 31, 2010 (or a renewal or extension of a guarantee so made).'. CommentsClose CommentsPermalink





(b) Safety and Soundness Requirements- Paragraph (3) of section 149(b) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(E) SAFETY AND SOUNDNESS REQUIREMENTS FOR FEDERAL HOME LOAN BANKS- Clause (iv) of subparagraph (A) shall not apply to any guarantee by a Federal home loan bank unless such bank meets safety and soundness collateral requirements for such guarantees which are at least as stringent as such requirements which apply under regulations applicable to such guarantees by Federal home loan banks as in effect on April 9, 2008.'. CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to guarantees made after the date of the enactment of this Act. CommentsClose CommentsPermalink

SEC. 144. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN AFFIDAVITS.

(a) In General- Subsection (b) of section 1445 (relating to exemptions) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(9) ALTERNATIVE PROCEDURE FOR FURNISHING NONFOREIGN AFFIDAVIT- For purposes of paragraphs (2) and (7)-- CommentsClose CommentsPermalink





`(A) IN GENERAL- Paragraph (2) shall be treated as applying to a transaction if, in connection with a disposition of a United States real property interest-- CommentsClose CommentsPermalink





`(i) the affidavit specified in paragraph (2) is furnished to a qualified substitute, and CommentsClose CommentsPermalink





`(ii) the qualified substitute furnishes a statement to the transferee stating, under penalty of perjury, that the qualified substitute has such affidavit in his possession. CommentsClose CommentsPermalink





`(B) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph.'. CommentsClose CommentsPermalink





(b) Qualified Substitute- Subsection (f) of section 1445 (relating to definitions) is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(6) QUALIFIED SUBSTITUTE- The term `qualified substitute' means, with respect to a disposition of a United States real property interest-- CommentsClose CommentsPermalink





`(A) the person (including any attorney or title company) responsible for closing the transaction, other than the transferor's agent, and CommentsClose CommentsPermalink





`(B) the transferee's agent.'. CommentsClose CommentsPermalink





(c) Exemption Not To Apply if Knowledge or Notice That Affidavit or Statement Is False- CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (7) of section 1445(b) (relating to special rules for paragraphs (2) and (3)) is amended to read as follows: CommentsClose CommentsPermalink





`(7) SPECIAL RULES FOR PARAGRAPHS (2), (3), AND (9)- Paragraph (2), (3), or (9) (as the case may be) shall not apply to any disposition-- CommentsClose CommentsPermalink





`(A) if-- CommentsClose CommentsPermalink





`(i) the transferee or qualified substitute has actual knowledge that the affidavit referred to in such paragraph, or the statement referred to in paragraph (9)(A)(ii), is false, or CommentsClose CommentsPermalink





`(ii) the transferee or qualified substitute receives a notice (as described in subsection (d)) from a transferor's agent, transferee's agent, or qualified substitute that such affidavit or statement is false, or CommentsClose CommentsPermalink





`(B) if the Secretary by regulations requires the transferee or qualified substitute to furnish a copy of such affidavit or statement to the Secretary and the transferee or qualified substitute fails to furnish a copy of such affidavit or statement to the Secretary at such time and in such manner as required by such regulations.'. CommentsClose CommentsPermalink





(2) LIABILITY- CommentsClose CommentsPermalink





(A) NOTICE- Paragraph (1) of section 1445(d) (relating to notice of false affidavit; foreign corporations) is amended to read as follows: CommentsClose CommentsPermalink





`(1) NOTICE OF FALSE AFFIDAVIT; FOREIGN CORPORATIONS- If-- CommentsClose CommentsPermalink





`(A) the transferor furnishes the transferee or qualified substitute an affidavit described in paragraph (2) of subsection (b) or a domestic corporation furnishes the transferee an affidavit described in paragraph (3) of subsection (b), and CommentsClose CommentsPermalink





`(B) in the case of-- CommentsClose CommentsPermalink





`(i) any transferor's agent-- CommentsClose CommentsPermalink





`(I) such agent has actual knowledge that such affidavit is false, or CommentsClose CommentsPermalink





`(II) in the case of an affidavit described in subsection (b)(2) furnished by a corporation, such corporation is a foreign corporation, or CommentsClose CommentsPermalink





`(ii) any transferee's agent or qualified substitute, such agent or substitute has actual knowledge that such affidavit is false, CommentsClose CommentsPermalink





such agent or qualified substitute shall so notify the transferee at such time and in such manner as the Secretary shall require by regulations.'. CommentsClose CommentsPermalink





(B) FAILURE TO FURNISH NOTICE- Paragraph (2) of section 1445(d) (relating to failure to furnish notice) is amended to read as follows: CommentsClose CommentsPermalink





`(2) FAILURE TO FURNISH NOTICE- CommentsClose CommentsPermalink





`(A) IN GENERAL- If any transferor's agent, transferee's agent, or qualified substitute is required by paragraph (1) to furnish notice, but fails to furnish such notice at such time or times and in such manner as may be required by regulations, such agent or substitute shall have the same duty to deduct and withhold that the transferee would have had if such agent or substitute had complied with paragraph (1). CommentsClose CommentsPermalink





`(B) LIABILITY LIMITED TO AMOUNT OF COMPENSATION- An agent's or substitute's liability under subparagraph (A) shall be limited to the amount of compensation the agent or substitute derives from the transaction.'. CommentsClose CommentsPermalink





(C) CONFORMING AMENDMENT- The heading for section 1445(d) is amended by striking `or Transferee's Agents' and inserting `, Transferee's Agents, or Qualified Substitutes'. CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to dispositions of United States real property interests after the date of the enactment of this Act. CommentsClose CommentsPermalink

SEC. 145. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR PURPOSES OF THE REHABILITATION CREDIT.

(a) In General- CSubclause (I) of section 47(c)(2)(B)(v) is amended by striking `section 168(h)' and inserting `section 168(h), except that `50 percent' shall be substituted for `35 percent' in paragraph (1)(B)(iii) thereof'. CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to expenditures properly taken into account for periods after December 31, 2007. CommentsClose CommentsPermalink

TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

Subtitle A--Foreign Currency and Other Qualified Activities

SEC. 201. REVISIONS TO REIT INCOME TESTS.

(a) Addition of Permissible Income Categories- Section 856(c) (relating to limitations) is amended-- CommentsClose CommentsPermalink





(1) by striking `and' at the end of paragraph (2)(G) and by inserting after paragraph (2)(H) the following new subparagraphs: CommentsClose CommentsPermalink





`(I) passive foreign exchange gains; and CommentsClose CommentsPermalink





`(J) any other item of income or gain as determined by the Secretary;', and CommentsClose CommentsPermalink





(2) by striking `and' at the end of paragraphs (3)(H) and (3)(I) and by inserting after paragraph (3)(I) the following new subparagraphs: CommentsClose CommentsPermalink





`(J) real estate foreign exchange gains; and CommentsClose CommentsPermalink





`(K) any other item of income or gain as determined by the Secretary; and'. CommentsClose CommentsPermalink





(b) Rules Regarding Foreign Currency Transactions- Section 856 (defining real estate investment trust) is amended by adding at the end the following new subsection: CommentsClose CommentsPermalink





`(n) Rules Regarding Foreign Currency Transactions- With respect to any taxable year-- CommentsClose CommentsPermalink





`(1) REAL ESTATE FOREIGN EXCHANGE GAINS- For purposes of subsection (c)(3)(J), the term `real estate foreign exchange gains' means-- CommentsClose CommentsPermalink





`(A) foreign currency gains (as defined in section 988(b)(1)) which are attributable to-- CommentsClose CommentsPermalink





`(i) any item described in subsection (c)(3) (other than in subparagraph (J) thereof), CommentsClose CommentsPermalink





`(ii) the acquisition or ownership of obligations secured by mortgages on real property or on interests in real property (other than foreign currency gains attributable to any item described in clause (i)), or CommentsClose CommentsPermalink





`(iii) becoming or being the obligor under obligations secured by mortgages on real property or on interests in real property (other than foreign currency gains attributable to any item described in clause (i)), CommentsClose CommentsPermalink





`(B) gains described in section 987 attributable to a qualified business unit (as defined by section 989) of the real estate investment trust, but only if such qualified business unit meets the requirements under-- CommentsClose CommentsPermalink





`(i) subsection (c)(3) (without regard to subparagraph (J) thereof) for the taxable year, and CommentsClose CommentsPermalink





`(ii) subsection (c)(4)(A) at the close of each quarter that the real estate investment trust has directly or indirectly held the qualified business unit, and CommentsClose CommentsPermalink





`(C) any other foreign currency gains as determined by the Secretary. CommentsClose CommentsPermalink





`(2) PASSIVE FOREIGN EXCHANGE GAINS- For purposes of subsection (c)(2)(I), the term `passive foreign exchange gains' means-- CommentsClose CommentsPermalink





`(A) real estate foreign exchange gains, CommentsClose CommentsPermalink





`(B) foreign currency gains (as defined in section 988(b)(1)) which are not described in subparagraph (A) and which are attributable to any item described in subsection (c)(2) (other than in subparagraph (I) thereof), and CommentsClose CommentsPermalink





`(C) any other foreign currency gains as determined by the Secretary.'. CommentsClose CommentsPermalink





(c) Addition to REIT Hedging Rule- Subparagraph (G) of section 856(c)(5) is amended to read as follows: CommentsClose CommentsPermalink





`(G) TREATMENT OF CERTAIN HEDGING INSTRUMENTS- Except to the extent as determined by the Secretary-- CommentsClose CommentsPermalink





`(i) any income of a real estate investment trust from a hedging transaction (as defined in clause (ii) or (iii) of section 1221(b)(2)(A)) which is clearly identified pursuant to section 1221(a)(7), including gain from the sale or disposition of such a transaction, shall not constitute gross income under paragraphs (2) and (3) to the extent that the transaction hedges any indebtedness incurred or to be incurred by the trust to acquire or carry real estate assets, and CommentsClose CommentsPermalink





`(ii) any income of a real estate investment trust from a transaction entered into by the trust primarily to manage risk of currency fluctuations with respect to any item described in paragraph (2) or (3), including gain from the termination of such a transaction, shall not constitute gross income under paragraphs (2) and (3), but only if such transaction is clearly identified as such before the close of the day on which it was acquired, originated, or entered into (or such other time as the Secretary may prescribe).'. CommentsClose CommentsPermalink





(d) Authority Tto Exclude Items of Income From REIT Income Tests- Section 856(c)(5) is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(H) SECRETARIAL AUTHORITY TO EXCLUDE OTHER ITEMS OF INCOME- The Secretary is authorized to determine whether any item of income or gain which does not otherwise qualify under paragraph (2) or (3) may be considered as not constituting gross income solely for purposes of this part.'. CommentsClose CommentsPermalink

SEC. 202. REVISIONS TO REIT ASSET TESTS.

(a) Clarification of Valuation Test- The first sentence in the matter following section 856(c)(4)(B)(iii)(III) is amended by inserting `(including a discrepancy caused solely by the change in the foreign currency exchange rate used to value a foreign asset)' after `such requirements'. CommentsClose CommentsPermalink





(b) Clarification of Permissible Asset Category- Section 856(c)(5), as amended by section 3201(d), is amended by adding at the end the following new subparagraph: CommentsClose CommentsPermalink





`(I) CASH- The term `cash' includes foreign currency if the real estate investment trust or its qualified business unit (as defined in section 989) uses such foreign currency as its functional currency (as defined in section 985(b)).'. CommentsClose CommentsPermalink

SEC. 203. CONFORMING FOREIGN CURRENCY REVISIONS.

(a) Net Income From Foreclosure Property- Clause (i) of section 857(b)(4)(B) is amended to read as follows: CommentsClose CommentsPermalink





`(i) gain (including any foreign currency gain, as defined in section 988(b)(1)) from the sale or other disposition of foreclosure property described in section 1221(a)(1) and the gross income for the taxable year derived from foreclosure property (as defined in section 856(e)), but only to the extent such gross income is not described in (or, in the case of foreign currency gain, not attributable to gross income described in) section 856(c)(3) other than subparagraph (F) thereof, over'. CommentsClose CommentsPermalink





(b) Net Income From Prohibited Transactions- Clause (i) of section 857(b)(6)(B) is amended to read as follows: CommentsClose CommentsPermalink





`(i) the term `net income derived from prohibited transactions' means the excess of the gain (including any foreign currency gain, as defined in section 988(b)(1)) from prohibited transactions over the deductions (including any foreign currency loss, as defined in section 988(b)(2)) allowed by this chapter which are directly connected with prohibited transactions;'. CommentsClose CommentsPermalink

Subtitle B--Taxable REIT Subsidiaries

SEC. 211. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

Section 856(c)(4)(B)(ii) is amended by striking `20 percent' and inserting `25 percent'. CommentsClose CommentsPermalink

Subtitle C--Dealer Sales

SEC. 221. HOLDING PERIOD UNDER SAFE HARBOR.

Section 857(b)(6) (relating to income from prohibited transactions) is amended-- CommentsClose CommentsPermalink





(1) by striking `4 years' in subparagraphs (C)(i), (C)(iv), and (D)(i) and inserting `2 years', CommentsClose CommentsPermalink





(2) by striking `4-year period' in subparagraphs (C)(ii), (D)(ii), and (D)(iii) and inserting `2-year period', and CommentsClose CommentsPermalink





(3) by striking `real estate asset'and all that follows through `if' in the matter preceding clause (i) of subparagraphs (C) and (D), respectively, and inserting `real estate asset (as defined in section 856(c)(5)(B)) and which is described in section 1221(a)(1) if'. CommentsClose CommentsPermalink

SEC. 222. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

Section 857(b)(6) is amended-- CommentsClose CommentsPermalink





(1) by striking the semicolon at the end of subparagraph (C)(iii) and inserting `, or (III) the fair market value of property (other than sales of foreclosure property or sales to which section 1033 applies) sold during the taxable year does not exceed 10 percent of the fair market value of all of the assets of the trust as of the beginning of the taxable year;', and CommentsClose CommentsPermalink





(2) by adding `or' at the end of subclause (II) of subparagraph (D)(iv) and by adding at the end of such subparagraph the following new subclause: CommentsClose CommentsPermalink





`(III) the fair market value of property (other than sales of foreclosure property or sales to which section 1033 applies) sold during the taxable year does not exceed 10 percent of the fair market value of all of the assets of the trust as of the beginning of the taxable year,'. CommentsClose CommentsPermalink

Subtitle D--Health Care REITs

SEC. 231. CONFORMITY FOR HEALTH CARE FACILITIES.

(a) Related Party Rentals- Subparagraph (B) of section 856(d)(8) (relating to special rule for taxable REIT subsidiaries) is amended to read as follows: CommentsClose CommentsPermalink





`(B) EXCEPTION FOR CERTAIN LODGING FACILITIES AND HEALTH CARE PROPERTY- The requirements of this subparagraph are met with respect to an interest in real property which is a qualified lodging facility or a qualified health care property (as defined in subsection (e)(6)(D)(i)) leased by the trust to a taxable REIT subsidiary of the trust if the property is operated on behalf of such subsidiary by a person who is an eligible independent contractor. For purposes of this section, a taxable REIT subsidiary is not considered to be operating or managing a qualified health care property or qualified lodging facility solely because it directly or indirectly possesses a license, permit or similar instrument enabling it to do so.'. CommentsClose CommentsPermalink





(b) Eligible Independent Contractor- Subparagraphs (A) and (B) of section 856(d)(9) (relating to eligible independent contractor) are amended to read as follows: CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `eligible independent contractor' means, with respect to any qualified lodging facility or qualified health care property (as defined in subsection (e)(6)(D)(i)), any independent contractor if, at the time such contractor enters into a management agreement or other similar service contract with the taxable REIT subsidiary to operate such qualified lodging facility or qualified health care property, such contractor (or any related person) is actively engaged in the trade or business of operating qualified lodging facilities or qualified health care properties, respectively, for any person who is not a related person with respect to the real estate investment trust or the taxable REIT subsidiary. CommentsClose CommentsPermalink





`(B) SPECIAL RULES- Solely for purposes of this paragraph and paragraph (8)(B), a person shall not fail to be treated as an independent contractor with respect to any qualified lodging facility or qualified health care property (as so defined) by reason of the following: CommentsClose CommentsPermalink





`(i) The taxable REIT subsidiary bears the expenses for the operation of such qualified lodging facility or qualified health care property pursuant to the management agreement or other similar service contract. CommentsClose CommentsPermalink





`(ii) The taxable REIT subsidiary receives the revenues from the operation of such qualified lodging facility or qualified health care property, net of expenses for such operation and fees payable to the operator pursuant to such agreement or contract. CommentsClose CommentsPermalink





`(iii) The real estate investment trust receives income from such person with respect to another property that is attributable to a lease of such other property to such person that was in effect as of the later of-- CommentsClose CommentsPermalink





`(I) January 1, 1999, or CommentsClose CommentsPermalink





`(II) the earliest date that any taxable REIT subsidiary of such trust entered into a management agreement or other similar service contract with such person with respect to such qualified lodging facility or qualified health care property.'. CommentsClose CommentsPermalink





(c) Taxable Reit Subsidiaries- The last sentence of section 856(l)(3) is amended-- CommentsClose CommentsPermalink





(1) by inserting `or a health care facility' after `a lodging facility', and CommentsClose CommentsPermalink





(2) by inserting `or health care facility' after `such lodging facility'. CommentsClose CommentsPermalink

Subtitle E--Effective Dates

SEC. 241. EFFECTIVE DATES.

(a) In General- Except as otherwise provided in this section, the amendments made by this title shall apply to taxable years beginning after the date of the enactment of this Act. CommentsClose CommentsPermalink





(b) REIT Income Tests- CommentsClose CommentsPermalink





(1) The amendment made by section 201(a) and (b) shall apply to gains and items of income recognized after the date of the enactment of this Act. CommentsClose CommentsPermalink





(2) The amendment made by section 201(c) shall apply to transactions entered into after the date of the enactment of this Act. CommentsClose CommentsPermalink





(3) The amendment made by section 201(d) shall apply after the date of the enactment of this Act. CommentsClose CommentsPermalink





(c) Conforming Foreign Currency Revisions- CommentsClose CommentsPermalink





(1) The amendment made by section 203(a) shall apply to gains recognized after the date of the enactment of this Act. CommentsClose CommentsPermalink





(2) The amendment made by section 203(b) shall apply to gains and deductions recognized after the date of the enactment of this Act. CommentsClose CommentsPermalink





(d) Dealer Sales- The amendments made by subtitle C shall apply to sales made after the date of the enactment of this Act. CommentsClose CommentsPermalink

TITLE III--REVENUE PROVISIONS

SEC. 301. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES TRANSACTIONS.

(a) In General- CommentsClose CommentsPermalink





(1) BROKER REPORTING FOR SECURITIES TRANSACTIONS- Section 6045 (relating to returns of brokers) is amended by adding at the end the following new subsection: CommentsClose CommentsPermalink





`(g) Additional Information Required in the Case of Securities Transactions, etc- CommentsClose CommentsPermalink





`(1) IN GENERAL- If a broker is otherwise required to make a return under subsection (a) with respect to the gross proceeds of the sale of a covered security, the broker shall include in such return the information described in paragraph (2). CommentsClose CommentsPermalink





`(2) ADDITIONAL INFORMATION REQUIRED- CommentsClose CommentsPermalink





`(A) IN GENERAL- The information required under paragraph (1) to be shown on a return with respect to a covered security of a customer shall include the customer's adjusted basis in such security and whether any gain or loss with respect to such security is long-term or short-term (within the meaning of section 1222). CommentsClose CommentsPermalink





`(B) DETERMINATION OF ADJUSTED BASIS- For purposes of subparagraph (A)-- CommentsClose CommentsPermalink





`(i) IN GENERAL- The customer's adjusted basis shall be determined-- CommentsClose CommentsPermalink





`(I) in the case of any security (other than any stock for which an average basis method is permissible under section 1012), in accordance with the first-in first-out method unless the customer notifies the broker by means of making an adequate identification of the stock sold or transferred,`(II) in the case of any stock for which an average basis method is permissible under section 1012 and which is acquired before January 1, 2012, in accordance with any acceptable method under section 1012 with respect to the account in which such interest is held, and`(I and CommentsClose CommentsPermalink





`(II) in the case of any stock for which an average basis method is permissible under section 1012 and which is acquired after December 31, 2011, in accordance with the broker's default method unless the customer notifies the broker that he elects another acceptable method under section 1012 with respect to the account in which such intereststock is held. CommentsClose CommentsPermalink





`(ii) EXCEPTION FOR WASH SALES- Except as otherwise provided by the Secretary, the customer's adjusted basis shall be determined without regard to section 1091 (relating to loss from wash sales of stock or securities) unless the transactions occur in the same account with respect to identical securities. CommentsClose CommentsPermalink





`(3) COVERED SECURITY- For purposes of this subsection-- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `covered security' means any specified security acquired on or after the applicable date if such security-- CommentsClose CommentsPermalink





`(i) was acquired through a transaction in the account in which such security is held, or CommentsClose CommentsPermalink





`(ii) was transferred to such account from an account in which such security was a covered security, but only if the broker received a statement under section 6045A with respect to the transfer. CommentsClose CommentsPermalink





`(B) SPECIFIED SECURITY- The term `specified security' means-- CommentsClose CommentsPermalink





`(i) any share of stock in a corporation, CommentsClose CommentsPermalink





`(ii) any note, bond, debenture, or other evidence of indebtedness, CommentsClose CommentsPermalink





`(iii) any commodity, or contract or derivative with respect to such commodity, if the Secretary determines that adjusted basis reporting is appropriate for purposes of this subsection, and CommentsClose CommentsPermalink





`(iv) any other financial instrument with respect to which the Secretary determines that adjusted basis reporting is appropriate for purposes of this subsection. CommentsClose CommentsPermalink





`(C) APPLICABLE DATE- The term `applicable date' means-- CommentsClose CommentsPermalink





`(i) January 1, 2010, in the case of any specified security which is stock in a corporation, and (other than any stock described in clause (ii)), CommentsClose CommentsPermalink





`(ii) January 1, 2011, in the case of any stock for which an average basis method is permissible under section 1012, and CommentsClose CommentsPermalink





`(iii) January 1, 2012, or such later date determined by the Secretary in the case of any other specified security. CommentsClose CommentsPermalink





`(4) TREATMENT OF S CORPORATIONS- In the case of the sale of a covered security acquired by an S corporation (other than a financial institution) after December 31, 2011, such S corporation shall be treated in the same manner as a partnership for purposes of this section. CommentsClose CommentsPermalink





`(5) SPECIAL RULES FOR SHORT SALES-`(A) IN GENERAL- In the case of a short sale, reporting under this section shall be made for the year in which such sale is closed.`(B) EXCEPTION FOR CONSTRUCTIVE SALES- Subparagraph (A) shall not apply to any short sale which results in a constructive sale under section 1259 with respect to property held in the account in which the short sale is entered into.'. CommentsClose CommentsPermalink





(2) BROKER INFORMATION REQUIRED WITH RESPECT TO OPTIONS- Section 6045, as amended by subsection (a), is amended by adding at the end the following new subsection: CommentsClose CommentsPermalink





`(h) Application to Options on Securities- CommentsClose CommentsPermalink





`(1) EXERCISE OF OPTION- For purposes of this section, in the case of anyf a covered security is acquired or disposed of pursuant to the exercise of an option on a covered security where the optionthat was granted or acquired in the same account as the covered security, the amount received or paid with respect to such exercisewith respect to the grant or paid with respect to the acquisition of such option shall be treated as an adjustment to gross proceeds or as an adjustment to basis, as the case may be. CommentsClose CommentsPermalink





`(2) LAPSE OR CLOSING TRANSACTION- For purposes of this section, in the case of theIn the case of the lapse (or closing transaction (as defined in section 1234(b)(2)(A))) of an option on a specified security where the taxpayer is the grantor of the option, this section shall apply as if the premium received for such option were gross proceeds received on the date of the lapse or closing transaction, and the cost (if any) of the closing transaction shall be taken into account as adjusted basis. In the case of anor the exercise of a cash-settled option on a specified security where the taxpayer is the grantee of such option, this section shall apply as if the grantee received gross proceeds of zero on the date of the lap, reporting under subsections (a) and (g) with respect to such option shall be made for the calendar year which includes the date of such lapse, closing transaction, or exercise. CommentsClose CommentsPermalink





`(3) PROSPECTIVE APPLICATION- Paragraphs (1) and (2) shall not apply to any option which is granted or acquired before January 1, 2012. CommentsClose CommentsPermalink





`(4) DEFINITIONS- For purposes of this subsection, the terms `covered security' and `specified security' shall have the meanings given such terms in subsection (g)(3).'. CommentsClose CommentsPermalink





(3) EXTENSION OF PERIOD FOR STATEMENTS SENT TO CUSTOMERS- CommentsClose CommentsPermalink





(A) IN GENERAL- Subsection (b) of section 6045 is amended by striking `January 31' and inserting `February 15'. CommentsClose CommentsPermalink





(B) STATEMENTS RELATED TO SUBSTITUTE PAYMENTS- Subsection (d) of section 6045 is amended-- CommentsClose CommentsPermalink





(i) by striking `at such time and', and CommentsClose CommentsPermalink





(ii) by inserting after `other item.' the following new sentence: `The written statement required under the preceding sentence shall be furnished on or before February 15 of the year following the calendar year in which the payment was made.'. CommentsClose CommentsPermalink





(C) OTHER STATEMENTS- Subsection (b) of section 6045 is amended by adding at the end the following: `In the case of a consolidated reporting statement (as defined in regulations) with respect to any account which includes the statement required by this subsection, any statement which would otherwise be required to be furnished on or before January 31 of a calendar year under section 6042(c), 6049(c)(2)(A), or 6050N(b) with respect to any item in such accountwith respect to any item reportable to the taxpayer shall instead be required to be furnished on or before February 15 of such calendar year if furnished as part ofwith such consolidated reporting statement.'. CommentsClose CommentsPermalink





(b) Determination of Basis of Certain Securities on Account by Account or Average Basis Method- Section 1012 (relating to basis of property-cost) is amended-- CommentsClose CommentsPermalink





(1) by striking `The basis of property' and inserting the following: CommentsClose CommentsPermalink





`(a) In General- The basis of property', CommentsClose CommentsPermalink





(2) by striking `The cost of real property' and inserting the following: CommentsClose CommentsPermalink





`(b) Special Rule for Apportioned Real Estate Taxes- The cost of real property', and CommentsClose CommentsPermalink





(3) by adding at the end the following new subsections: CommentsClose CommentsPermalink





`(c) Determinations by Account- CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of the sale, exchange, or other disposition of a specified security on or after the applicable date, the conventions prescribed by regulations under this section shall be applied on an account by account basis. CommentsClose CommentsPermalink





`(2) APPLICATION TO OPEN-END FUNDS- CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), any stock in an open-end fund acquired before January 1, 20101, shall be treated as a separate account from any such stock acquired on or after such date. CommentsClose CommentsPermalink





`(B) ELECTION BY OPEN-END FUND FOR TREATMENT AS SINGLE ACCOUNT- If an open-end fund elects to have this subparagraph apply with respect to one or more of its stockholders-- CommentsClose CommentsPermalink





`(i) subparagraph (A) shall not apply with respect to any stock in such fund held by such stockholders, and CommentsClose CommentsPermalink





`(ii) all stock in such fund which is held by such stockholders shall be treated as covered securities described in section 6045(g)(3) without regard to the date of the acquisition of such stock. CommentsClose CommentsPermalink





A rule similar to the rule of the preceding sentence shall apply with respect to a broker holding stock in an open-end fund as a nominee. CommentsClose CommentsPermalink





`(3) DEFINITIONS- For purposes of this section-- CommentsClose CommentsPermalink





`(A) OPEN-END FUND- The term `open-end fund' means a regulated investment company (as defined in section 851) which is offering for sale or has outstanding any redeemable security of which it is the issuer and the shares of which are not. Any stock which is traded on an established securities exchange shall not be treated as stock in an open-end fund. CommentsClose CommentsPermalink





`(B) SPECIFIED SECURITY; APPLICABLE DATE- The terms `specified security' and `applicable date' shall have the meaning given such terms in section 6045(g). CommentsClose CommentsPermalink





`(d) Average Basis for Stock Acquired Pursuant to a Dividend Reinvestment Plan- CommentsClose CommentsPermalink





`(1) IN GENERAL- In the case of any stock acquired after December 31, 200910, in connection with a dividend reinvestment plan, the basis of such stock while held as part of such plan shall be determined using one of the methods which may be used for determining the basis of stock in an open-end fund. CommentsClose CommentsPermalink





`(2) TREATMENT AFTER TRANSFER- In the case of the transfer to another account of stock to which paragraph (1) applies, such stock shall have a cost basis in such other account equal to its basis in the dividend reinvestment plan immediately before such transfer (properly adjusted for any fees or other charges taken into account in connection with such transfer). CommentsClose CommentsPermalink





`(3) SEPARATE ACCOUNTS; ELECTION FOR TREATMENT AS SINGLE ACCOUNT- Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection. CommentsClose CommentsPermalink





`(34) DIVIDEND REINVESTMENT PLAN- For purposes of this subsection-- CommentsClose CommentsPermalink





`(A) IN GENERAL- The term `dividend reinvestment plan' means any arrangement under which dividends on any stock are reinvested in stock identical to the stock with respect to which the dividends are paid. CommentsClose CommentsPermalink





`(B) INITIAL STOCK ACQUISITION TREATED AS ACQUIRED IN CONNECTION WITH PLAN- Stock shall be treated as acquired in connection with a dividend reinvestment plan if such stock is acquired pursuant to such plan or if the dividends paid on such stock are subject to such plan.'. CommentsClose CommentsPermalink





(c) Information by Transferors To Aid Brokers- CommentsClose CommentsPermalink





(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 is amended by inserting after section 6045 the following new section: CommentsClose CommentsPermalink

`SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF COVERED SECURITIES TO BROKERS.

`(a) Furnishing of Information- Every applicable person which transfers to a broker (as defined in section 6045(c)(1)) a security which is a covered security (as defined in section 6045(g)(3)) in the hands of such applicable person shall furnish to such broker a written statement in such manner and setting forth such information as the Secretary may by regulations prescribe for purposes of enabling such broker to meet the requirements of section 6045(g). CommentsClose CommentsPermalink





`(b) Applicable Person- For purposes of subsection (a), the term `applicable person' means-- CommentsClose CommentsPermalink





`(1) any broker (as defined in section 6045(c)(1)), and CommentsClose CommentsPermalink





`(2) any other person as provided by the Secretary in regulations. CommentsClose CommentsPermalink





`(c) Time for Furnishing Statement- Except as otherwise provided by the Secretary, any statement required by subsection (a) shall be furnished on the date of the not later than 15 days after the date of the transfer described in such subsection.'. CommentsClose CommentsPermalink





(2) ASSESSABLE PENALTIES- Paragraph (2) of section 6724(d) (defining payee statement) is amended by redesignating subparagraphs (I) through (CC) as subparagraphs (J) through (DD), respectively, and by inserting after subparagraph (H) the following new subparagraph: CommentsClose CommentsPermalink





`(I) section 6045A (relating to information required in connection with transfers of covered securities to brokers).,'. CommentsClose CommentsPermalink





(3) CLERICAL AMENDMENT- The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by inserting after the item relating to section 6045 the following new item: CommentsClose CommentsPermalink





`Sec. 6045A. Information required in connection with transfers of covered securities to brokers.'. CommentsClose CommentsPermalink





(d) Additional Issuer Information To Aid Brokers- CommentsClose CommentsPermalink





(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986, as amended by subsection (b), is amended by inserting after section 6045A the following new section: CommentsClose CommentsPermalink

`SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED SECURITIES.

`(a) In General- According to the forms or regulations prescribed by the Secretary, any issuer of a specified security shall make a return setting forth-- CommentsClose CommentsPermalink





`(1) a description of any organizational action which affects the basis of such specified security of such issuer, CommentsClose CommentsPermalink





`(2) the quantitative effect on the basis of such specified security resulting from such action, and CommentsClose CommentsPermalink





`(3) such other information as the Secretary may prescribe. CommentsClose CommentsPermalink





`(b) Time for Filing Return- Any return required by subsection (a) shall be filed not later than the earlier of-- CommentsClose CommentsPermalink





`(1) 45 days after the date of the action described in subsection (a), or CommentsClose CommentsPermalink





`(2) January 15 of the year following the calendar year during which such action occurred. CommentsClose CommentsPermalink





`(c) Statements To Be Furnished to Holders of Specified Securities or Their Nominees- According to the forms or regulations prescribed by the Secretary, every person required to make a return under subsection (a) with respect to a specified security shall furnish to the nominee with respect to the specified security (or certificate holder if there is no nominee) a written statement showing-- CommentsClose CommentsPermalink





`(1) the name, address, and phone number of the information contact of the person required to make such return, CommentsClose CommentsPermalink





`(2) the information required to be shown on such return with respect to such security, and CommentsClose CommentsPermalink





`(3) such other information as the Secretary may prescribe. CommentsClose CommentsPermalink





The written statement required under the preceding sentence shall be furnished to the holder on or before January 15 of the year following the calendar year during which the action described in subsection (a) occurred. CommentsClose CommentsPermalink





`(d) Specified Security- For purposes of this section, the term `specified security' has the meaning given such term by section 6045(g)(3)(B). No return shall be required under this section with respect to actions described in subsection (a) with respect to a specified security which occur before the applicable date (as defined in section 6045(g)(3)(C)) with respect to such security. CommentsClose CommentsPermalink





`(e) Public Reporting in Lieu of Return- The Secretary may waive the requirements under subsections (a) and (c) with respect to a specified security, if the person required to make the return under subsection (a) makes publicly available, in such form and manner as the Secretary determines necessary to carry out the purposes of this section-- CommentsClose CommentsPermalink





`(1) the name, address, phone number, and email address of the information contact of such person, and CommentsClose CommentsPermalink





`(2) the information described in paragraphs (1), (2), and (3) of subsection (a).'. CommentsClose CommentsPermalink





(2) ASSESSABLE PENALTIES- CommentsClose CommentsPermalink





(A) Subparagraph (B) of section 6724(d)(1) of such Code (defining information return) is amended by redesignating clauses (iv) through (xix) (iv) and each of the clauses which follow as clauses (v) through (xxii), respectively, and by inserting after clause (iii) the following new clause: CommentsClose CommentsPermalink





`(iv) section 6045B(a) (relating to returns relating to actions affecting basis of specified securities),'. CommentsClose CommentsPermalink





(B) Paragraph (2) of section 6724(d) of such Code (defining payee statement), as amended by subsection (c)(2), is amended by redesignating subparagraphs (J) through (DD) as subparagraphs (K) through (EE), respectively, and by inserting after subparagraph (I) the following new subparagraph: CommentsClose CommentsPermalink





`(J) subsections (c) and (e) of section 6045B (relating to returns relating to actions affecting basis of specified securities).,'. CommentsClose CommentsPermalink





(3) CLERICAL AMENDMENT- The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code, as amended by subsection (b)(3), is amended by inserting after the item relating to section 6045A the following new item: CommentsClose CommentsPermalink





`Sec. 6045B. Returns relating to actions affecting basis of specified securities.'. CommentsClose CommentsPermalink





(e) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall take effect on January 1, 2010. CommentsClose CommentsPermalink





(2) EXTENSION OF PERIOD FOR STATEMENTS SENT TO CUSTOMERS- The amendments made by subsection (a)(3) shall apply to statements required to be furnished after December 31, 2008. CommentsClose CommentsPermalink

SEC. 302. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

(a) In General- Paragraphs (5)(D) and (6) of section 864(f) are each amended by striking `December 31, 2008' and inserting `December 31, 2009'. CommentsClose CommentsPermalink





(b) Transitional Rule- Subsection (f) of section 864 is amended by adding at the end the following new paragraph: CommentsClose CommentsPermalink





`(7) TRANSITION- In the case of the first taxable year to which this subsection applies, the increase (if any) in the amount of the interest expense allocable to sources within the United States by reason of the application of this subsection shall be 9078 percent of the amount of such increase determined without regard to this paragraph.'. CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008. CommentsClose CommentsPermalink

SEC. 303. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

(a) Repeal of Adjustment for 2012- Subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is amended by striking the percentage contained therein and inserting `100 percent'. CommentsClose CommentsPermalink





(b) Modification of Adjustment for 2013- The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 13 percentage points. CommentsClose CommentsPermalink