[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4637 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4637

    To amend the Internal Revenue Code of 1986 to allow an interest 
  deduction for contingent interest on a shared appreciation mortgage.


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                    IN THE HOUSE OF REPRESENTATIVES

                           September 25, 1998

Mr. Smith of Michigan introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to allow an interest 
  deduction for contingent interest on a shared appreciation mortgage.

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

SECTION 1. SHARED APPRECIATION MORTGAGES.

    (a) In General.--Section 163 of the Internal Revenue Code of 1986 
(relating to interest) is amended by redesignating subsection (m) as 
subsection (n) and by inserting after subsection (l) the following new 
subsection:
    ``(m) Shared Appreciation Mortgages.--
            ``(1) In general.--For purposes of subsection (a), the term 
        `interest' shall include contingent interest on a shared 
        appreciation mortgage.
            ``(2) Contingent interest.--For purposes of paragraph (1), 
        the term `contingent interest' means, in connection with a 
        shared appreciation mortgage, the amount the mortgagor is 
        required to pay to the mortgagee from--
                    ``(A) any gain realized on the sale or exchange of 
                the real property which is the only security for such 
                mortgage,
                    ``(B) any gain which would be realized if such 
                property were sold on a specified date, or
                    ``(C) appreciation in value as of any specified 
                date.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payments made during taxable years beginning after the date of 
the enactment of this Act.
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