[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4639 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4639

To amend the Internal Revenue Code of 1986 to treat income from certain 
   leases as income from rental real estate activities in which the 
                    taxpayer actively participates.


_______________________________________________________________________


                    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 treat income from certain 
   leases as income from rental real estate activities in which the 
                    taxpayer actively participates.

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

SECTION 1. CASH RENT LEASES AND NON-MATERIAL PARTICIPATION SHARE LEASES 
              TREATED AS RENTAL REAL ESTATE ACTIVITY.

    (a) In General.--Paragraph (7) of section 469(c) of the Internal 
Revenue Code of 1986 (relating to special rules for taxpayers in real 
property business) is amended by adding at the end the following new 
subparagraph:
                    ``(E) Nonmaterial participation lease.--
                            ``(i) In general.-- For purposes of this 
                        paragraph, rental real estate activity shall 
                        include the lease of real estate under a 
                        nonmaterial participation share lease.
                            ``(ii) Nonmaterial participation lease.--
                        For purposes of clause (i), the term 
                        `nonmaterial participation lease' means a lease 
                        if the income from such lease is not self-
                        employment income (as defined in section 
                        1402(b) for purposes of chapter 2.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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