II 109th CONGRESS 1st Session S. 83 IN THE SENATE OF THE UNITED STATES January 24, 2005 Mr. Inouye 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 provide tax relief for the conversion of cooperative housing corporations into condominiums.

1.

Nonrecognition of gain or loss on distributions by cooperative housing corporations

(a)

In general

Section 216(e) of the Internal Revenue Code of 1986 (relating to distributions by cooperative housing corporations) is amended to read as follows: (e)

Distributions by cooperative housing corporations

(1)

In general

Except as provided in regulations— (A)no gain or loss shall be recognized to a cooperative housing corporation on the distribution by such corporation of a dwelling unit to a stockholder in such corporation if such distribution is in exchange for the stockholder’s stock in such corporation, and (B)no gain or loss shall be recognized to a stockholder of such corporation on the transfer of such stockholder’s stock in an exchange described in subparagraph (A). (2)

Basis

The basis of a dwelling unit acquired in a distribution to which paragraph (1) applies shall be the same as the basis of the stock in the cooperative housing corporation for which it is exchanged, decreased in the amount of any money received by the taxpayer in such exchange. (3)

Applicability

This subsection shall not apply with respect to any dwelling unit the basis of which includes financing under any Federal, State, or local program for the purpose of assisting the construction of affordable housing cooperatives or the conversion of rental units to affordable housing cooperatives. . (b)

Effective date

The amendment made by this section shall apply to distributions after the date of the enactment of this Act.