[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1396 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1396
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for the purchase of a principal residence by a first-time
homebuyer.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 4, 2001
Mr. Conrad (for himself and Mr. Hutchinson) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for the purchase of a principal residence by a first-time
homebuyer.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. CREDIT FOR FIRST-TIME HOMEBUYERS.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting before section 26 the
following new section:
``SEC. 25C. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST-TIME HOMEBUYER.
``(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 any taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an amount equal to 10
percent of the purchase price of the residence.
``(b) Limitations.--
``(1) Maximum credit.--The credit allowed under subsection
(a) shall not exceed $6,500.
``(2) Limitation to one residence.--The credit under this
section shall be allowed with respect to only one residence of
the taxpayer.
``(3) Married individuals filing jointly.--In the case of a
husband and wife who file a joint return, the credit under this
section is allowable only if both the husband and wife are
first-time homebuyers, and the amount specified under paragraph
(1) shall apply to the joint return.
``(4) Married individuals filing separately.--In the case
of a married individual filing a separate return, the credit
under this section is allowable only if the individual is a
first-time homebuyer, and subsection (a) shall be applied by
substituting `$3,250' for `$6,500'.
``(5) Other taxpayers.--If 2 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 $6,500.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--
``(A) In general.--The term `first-time homebuyer'
means any individual is such individual (and if
married, such individual's spouse) had no present
ownership interest in a principal residence in the
United States during the 3-year period ending on the
date of the purchase of the principal residence to
which this section applies.
``(B) One-time only.--If an individual is treated
as a first-time homebuyer with respect to any principal
residence, such individual may not be treated as a
first-time homebuyer with respect to any other
principal residence.
``(2) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(3) Purchase and purchase price.--The terms `purchase'
and `purchase price' have the meanings provided by section
1400C(e).
``(d) Carryforward of Unused Credit.--If the credit allowable under
subsection (a) for any taxable year exceeds the limitation imposed by
section 26(a) for such taxable year reduced by the sum of the credits
allowable under this subpart (other than this section and sections 23,
24, 25, 25B, and 1400C) and section 27, such excess shall be carried to
the succeeding taxable year and added to the credit allowable under
subsection (a) for such taxable year.
``(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)(5) shall not apply.
``(f) Denial of Double Benefit.--No credit shall be allowed under
subsection (a) if the credit under section 1400C is allowed.
``(g) Basis Adjustment.--For purposes of this subtitle, if a credit
is allowed under this section with respect to the purchase of any
residence, the basis of such residence shall be reduced by the amount
of the credit so allowed.
``(h) Property to Which Section Applies.--The provisions of this
section apply to a principal residence if the taxpayer enters into, on
or after September 1, 2001, and before September 1, 2002, a binding
contract to purchase the residence, and purchases and occupies the
residence before April 1, 2003.''.
(b) Conforming Amendments.--
(1) Subsection (a) of section 1016 of the Internal Revenue
Code of 1986 (relating to general rule for adjustments to
basis) is amended by striking ``and'' at the end of paragraph
(26), by striking the period at the end of paragraph (27) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(28) in the case of a residence with respect to which a
credit was allowed under section 25C, to the extent provided in
section 25C(g).''.
(2) Subsection (a) of section 1016 of the Internal Revenue
Code of 1986 (relating to general rule for adjustments to
basis), as amended by section 205(b)(3) of the Economic Growth
and Tax Relief Reconciliation Act of 2001, is amended by
striking ``and'' at the end of paragraph (27), by striking the
period at the end of paragraph (28) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(29) in the case of a residence with respect to which a
credit was allowed under section 25C, to the extent provided in
section 25C(g).''.
(3) Section 23(b)(4)(B) of such Code, as added by section
202(f)(1) of the Economic Growth and Tax Relief Reconciliation
Act of 2001, is amended by inserting ``and section 25C'' after
``this section''.
(4) Section 24(b)(3)(B) of such Code, as added and amended
by the Economic Growth and Tax Relief Reconciliation Act of
2001, is amended by striking ``23 and 25B'' and inserting ``23,
25B, and 25C''.
(5) Section 25(e)(1)(C) of such Code is amended by striking
``23 and 1400C'' and by inserting ``23, 25C, and 1400C''.
(6) Section 25(e)(1)(C) of such Code, as amended by the
Economic Growth and Tax Relief Reconciliation Act of 2001, is
amended by inserting ``25C,'' after ``25B,''.
(7) Section 25B of such Code, as added by section 618(a) of
the Economic Growth and Tax Relief Reconciliation Act of 2001,
is amended by striking ``section 23'' and inserting ``sections
23 and 25C''.
(8) Section 1400C(d) of such Code is amended by inserting
``and section 25C'' after ``this section''.
(9) Section 1400C(d) of such Code, as amended by the
Economic Growth and Tax Relief Reconciliation Act of 2001, is
amended by striking ``and 25B'' and inserting ``25B, and 25C''.
(10) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
before the item relating to section 26 the following new item:
``Sec. 25C. Purchase of principal
residence by first-time
homebuyer.''.
(c) Effective Dates.--
(1) In general.--The amendments made by subsections (a) and
(b)(10) shall apply to taxable years beginning after December
31, 2000.
(2) Temporary conforming amendments.--The amendments made
by paragraphs (1), (5), and (8) of subsection (b) shall apply
to taxable years beginning after December 31, 2000, and before
January 1, 2002.
(3) Permanent conforming amendments.--The amendments made
by paragraphs (2), (3), (4), (6), (7), and (9) of subsection
(b) shall apply to taxable years beginning after December 31,
2001.
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