[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 523 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 523

    To amend the Internal Revenue Code of 1986 with respect to the 
                  treatment of certain bargain sales.


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                    IN THE HOUSE OF REPRESENTATIVES

                            January 13, 1995

 Mr. Zimmer (for himself, Mr. Saxton, Mr. Greenwood, Mr. Pallone, Mr. 
 Beilenson, Mr. Ackerman, Mr. Baldacci, and Mr. Ehlers) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 with respect to the 
                  treatment of certain bargain sales.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Land Preservation Tax Fairness Act 
of 1995''.

SECTION 2. TREATMENT OF CERTAIN BARGAIN SALES.

    (a) Basis Allocation Rules.--Subsection (b) of section 1011 of the 
Internal Revenue Code of 1986 (relating to bargain sale to charitable 
organization) is amended to read as follows:
    ``(b) Bargain Sale to Charitable Organization.--
            ``(1) In general.--If a deduction is allowable under 
        section 170 (relating to charitable contributions) by reason of 
        a sale, then the adjusted basis for determining gain from such 
        a sale shall be that portion of the adjusted basis which bears 
        the same ratio to the adjusted basis as the amount realized 
        bears to the fair market value of the property.
            ``(2) Special rule for certain sales of real property.--
        If--
                    ``(A) a deduction is allowable under section 170 by 
                reason of any sale, and
                    ``(B) such sale is a sale of real property (or an 
                interest therein) to a qualified organization (as 
                defined in section 170(h)),
        paragraph (1) shall not apply and the entire adjusted basis of 
        the property (or interest therein) shall be taken into account 
        in determining the amount of gain from such sale. If the sale 
        involves an interest which is a restriction described in 
        section 170(h)(2)(C), the entire adjusted basis of the property 
        to which the such restriction applies shall be taken into 
        account under the preceding sentences as the adjusted basis of 
        the interest.''
    (b) Determination of Fair Market Value.--Section 170 of such code 
is amended by redesignating subsection (m) as subsection (n) and by 
inserting after subsection (1) the following new subsection:
    ``(m) Determination of Value of Certain Restrictions.--If any 
restriction described in subsection (h)(2)(C) is sold to a qualified 
organization (as defined in subsection (h)), for purposes of 
determining the amount (if any) of the deduction allowable under this 
section with respect to such sale, the fair market value of such 
restriction shall be determined without regard to the amount paid 
therefor even if such amount is determined in a competitive fashion.''
    (c) Effective Date.--The amendments made by this section shall 
apply to sale after the date of the enactment of this Act.
                                 <all>