[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3648 Engrossed Amendment Senate (EAS)]
In the Senate of the United States,
December 14, 2007.
Resolved, That the bill from the House of Representatives (H.R.
3648) entitled ``An Act to amend the Internal Revenue Code of 1986 to
exclude discharges of indebtedness on principal residences from gross
income, and for other purposes.'', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mortgage Forgiveness Debt Relief Act
of 2007''.
SEC. 2. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE EXCLUDED FROM
GROSS INCOME.
(a) In General.--Paragraph (1) of section 108(a) of the Internal
Revenue Code of 1986 is amended by striking ``or'' at the end of
subparagraph (C), by striking the period at the end of subparagraph (D)
and inserting ``, or'', and by inserting after subparagraph (D) the
following new subparagraph:
``(E) the indebtedness discharged is qualified
principal residence indebtedness which is discharged
before January 1, 2010.''.
(b) Special Rules Relating to Qualified Principal Residence
Indebtedness.--Section 108 of such Code is amended by adding at the end
the following new subsection:
``(h) Special Rules Relating to Qualified Principal Residence
Indebtedness.--
``(1) Basis reduction.--The amount excluded from gross
income by reason of subsection (a)(1)(E) shall be applied to
reduce (but not below zero) the basis of the principal
residence of the taxpayer.
``(2) Qualified principal residence indebtedness.--For
purposes of this section, the term `qualified principal
residence indebtedness' means acquisition indebtedness (within
the meaning of section 163(h)(3)(B), applied by substituting
`$2,000,000 ($1,000,000' for `$1,000,000 ($500,000' in clause
(ii) thereof) with respect to the principal residence of the
taxpayer.
``(3) Exception for certain discharges not related to
taxpayer's financial condition.--Subsection (a)(1)(E) shall not
apply to the discharge of a loan if the discharge is on account
of services performed for the lender or any other factor not
directly related to a decline in the value of the residence or
to the financial condition of the taxpayer.
``(4) Ordering rule.--If any loan is discharged, in whole
or in part, and only a portion of such loan is qualified
principal residence indebtedness, subsection (a)(1)(E) shall
apply only to so much of the amount discharged as exceeds the
amount of the loan (as determined immediately before such
discharge) which is not qualified principal residence
indebtedness.
``(5) Principal residence.--For purposes of this
subsection, the term `principal residence' has the same meaning
as when used in section 121.''.
(c) Coordination.--
(1) Subparagraph (A) of section 108(a)(2) of such Code is
amended by striking ``and (D)'' and inserting ``(D), and (E)''.
(2) Paragraph (2) of section 108(a) of such Code is amended
by adding at the end the following new subparagraph:
``(C) Principal residence exclusion takes
precedence over insolvency exclusion unless elected
otherwise.--Paragraph (1)(B) shall not apply to a
discharge to which paragraph (1)(E) applies unless the
taxpayer elects to apply paragraph (1)(B) in lieu of
paragraph (1)(E).''.
(d) Effective Date.--The amendments made by this section shall
apply to discharges of indebtedness on or after January 1, 2007.
SEC. 3. EXTENSION OF TREATMENT OF MORTGAGE INSURANCE PREMIUMS AS
INTEREST.
(a) In General.--Subclause (I) of section 163(h)(3)(E)(iv) of the
Internal Revenue Code of 1986 (relating to termination) is amended by
striking ``December 31, 2007'' and inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or accrued after December 31, 2007.
SEC. 4. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE HOUSING
CORPORATION.
(a) In General.--Subparagraph (D) of section 216(b)(1) of the
Internal Revenue Code of 1986 (defining cooperative housing
corporation) is amended to read as follows:
``(D) meeting 1 or more of the following
requirements for the taxable year in which the taxes
and interest described in subsection (a) are paid or
incurred:
``(i) 80 percent or more of the
corporation's gross income for such taxable
year is derived from tenant-stockholders.
``(ii) At all times during such taxable
year, 80 percent or more of the total square
footage of the corporation's property is used
or available for use by the tenant-stockholders
for residential purposes or purposes ancillary
to such residential use.
``(iii) 90 percent or more of the
expenditures of the corporation paid or
incurred during such taxable year are paid or
incurred for the acquisition, construction,
management, maintenance, or care of the
corporation's property for the benefit of the
tenant-stockholders.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after the date of the enactment of this Act.
SEC. 5. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO VOLUNTEER
FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically excluded
from gross income) is amended by inserting after section 139A the
following new section:
``SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY
MEDICAL RESPONDERS.
``(a) In General.--In the case of any member of a qualified
volunteer emergency response organization, gross income shall not
include--
``(1) any qualified State and local tax benefit, and
``(2) any qualified payment.
``(b) Denial of Double Benefits.--In the case of any member of a
qualified volunteer emergency response organization--
``(1) the deduction under 164 shall be determined with
regard to any qualified State and local tax benefit, and
``(2) expenses paid or incurred by the taxpayer in
connection with the performance of services as such a member
shall be taken into account under section 170 only to the
extent such expenses exceed the amount of any qualified payment
excluded from gross income under subsection (a).
``(c) Definitions.--For purposes of this section--
``(1) Qualified state and local tax benefit.--The term
`qualified state and local tax benefit' means any reduction or
rebate of a tax described in paragraph (1), (2), or (3) of
section 164(a) provided by a State or political division
thereof on account of services performed as a member of a
qualified volunteer emergency response organization.
``(2) Qualified payment.--
``(A) In general.--The term `qualified payment'
means any payment (whether reimbursement or otherwise)
provided by a State or political division thereof on
account of the performance of services as a member of a
qualified volunteer emergency response organization.
``(B) Applicable dollar limitation.--The amount
determined under subparagraph (A) for any taxable year
shall not exceed $30 multiplied by the number of months
during such year that the taxpayer performs such
services.
``(3) Qualified volunteer emergency response
organization.--The term `qualified volunteer emergency response
organization' means any volunteer organization--
``(A) which is organized and operated to provide
firefighting or emergency medical services for persons
in the State or political subdivision, as the case may
be, and
``(B) which is required (by written agreement) by
the State or political subdivision to furnish
firefighting or emergency medical services in such
State or political subdivision.
``(d) Termination.--This section shall not apply with respect to
taxable years beginning after December 31, 2010.''.
(b) Clerical Amendment.--The table of sections for such part is
amended by inserting after the item relating to section 139A the
following new item:
``Sec. 139B. Benefits provided to volunteer firefighters and emergency
medical responders.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
SEC. 6. CLARIFICATION OF STUDENT HOUSING ELIGIBLE FOR LOW-INCOME
HOUSING CREDIT.
(a) In General.--Subclause (I) of section 42(i)(3)(D)(ii) of the
Internal Revenue Code of 1986 (relating to certain students not to
disqualify unit) is amended to read as follows:
``(I) single parents and their
children and such parents are not
dependents (as defined in section 152,
determined without regard to
subsections (b)(1), (b)(2), and
(d)(1)(B) thereof) of another
individual and such children are not
dependents (as so defined) of another
individual other than a parent of such
children, or.''
(b) Effective Date.--The amendment made by this section shall apply
to--
(1) housing credit amounts allocated before, on, or after
the date of the enactment of this Act, and
(2) buildings placed in service before, on, or after such
date to the extent paragraph (1) of section 42(h) of the
Internal Revenue Code of 1986 does not apply to any building by
reason of paragraph (4) thereof.
SEC. 7. APPLICATION OF JOINT RETURN LIMITATION FOR CAPITAL GAINS
EXCLUSION TO CERTAIN POST-MARRIAGE SALES OF PRINCIPAL
RESIDENCES BY SURVIVING SPOUSES.
(a) Sale Within 2 Years of Spouse's Death.--Section 121(b) of the
Internal Revenue Code of 1986 (relating to limitations) is amended by
adding at the end the following new paragraph:
``(4) Special rule for certain sales by surviving
spouses.--In the case of a sale or exchange of property by an
unmarried individual whose spouse is deceased on the date of
such sale, paragraph (1) shall be applied by substituting
`$500,000' for `$250,000' if such sale occurs not later than 2
years after the date of death of such spouse and the
requirements of paragraph (2)(A) were met immediately before
such date of death.''.
(b) Effective Date.--The amendment made by this section shall apply
to sales or exchanges after December 31, 2007.
SEC. 8. MODIFICATION OF PENALTY FOR FAILURE TO FILE PARTNERSHIP
RETURNS; LIMITATION ON DISCLOSURE.
(a) Extension of Time Limitation.--Section 6698(a) of the Internal
Revenue Code of 1986 (relating to failure to file partnership returns)
is amended by striking ``5 months'' and inserting ``12 months''.
(b) Increase in Penalty Amount.--Paragraph (1) of section 6698(b)
of such Code is amended by striking ``$50'' and inserting ``$85''.
(c) Limitation on Disclosure of Taxpayer Returns to Partners, S
Corporation Shareholders, Trust Beneficiaries, and Estate
Beneficiaries.--
(1) In general.--Section 6103(e) of such Code (relating to
disclosure to persons having material interest) is amended by
adding at the end the following new paragraph:
``(10) Limitation on certain disclosures under this
subsection.--In the case of an inspection or disclosure under
this subsection relating to the return of a partnership, S
corporation, trust, or an estate, the information inspected or
disclosed shall not include any supporting schedule,
attachment, or list which includes the taxpayer identity
information of a person other than the entity making the return
or the person conducting the inspection or to whom the
disclosure is made.''.
(2) Effective date.--The amendment made by this subsection
shall take effect on the date of the enactment of this Act.
(d) Effective Date.--The amendments made by subsections (a) and (b)
shall apply to returns required to be filed after the date of the
enactment of this Act.
SEC. 9. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS.
(a) In General.--Part I of subchapter B of chapter 68 of the
Internal Revenue Code of 1986 (relating to assessable penalties) is
amended by adding at the end the following new section:
``SEC. 6699. FAILURE TO FILE S CORPORATION RETURN.
``(a) General Rule.--In addition to the penalty imposed by section
7203 (relating to willful failure to file return, supply information,
or pay tax), if any S corporation required to file a return under
section 6037 for any taxable year--
``(1) fails to file such return at the time prescribed
therefor (determined with regard to any extension of time for
filing), or
``(2) files a return which fails to show the information
required under section 6037,
such S corporation shall be liable for a penalty determined under
subsection (b) for each month (or fraction thereof) during which such
failure continues (but not to exceed 12 months), unless it is shown
that such failure is due to reasonable cause.
``(b) Amount Per Month.--For purposes of subsection (a), the amount
determined under this subsection for any month is the product of--
``(1) $85, multiplied by
``(2) the number of persons who were shareholders in the S
corporation during any part of the taxable year.
``(c) Assessment of Penalty.--The penalty imposed by subsection (a)
shall be assessed against the S corporation.
``(d) Deficiency Procedures Not To Apply.--Subchapter B of chapter
63 (relating to deficiency procedures for income, estate, gift, and
certain excise taxes) shall not apply in respect of the assessment or
collection of any penalty imposed by subsection (a).''.
(b) Clerical Amendment.--The table of sections for part I of
subchapter B of chapter 68 of such Code is amended by adding at the end
the following new item:
``Sec. 6699. Failure to file S corporation return.''.
(c) Effective Date.--The amendments made by this section shall
apply to returns required to be filed after the date of the enactment
of this Act.
SEC. 10. MODIFICATION OF REQUIRED INSTALLMENT OF CORPORATE ESTIMATED
TAXES WITH RESPECT TO CERTAIN DATES.
The percentage under subparagraph (B) of section 401(1) of the Tax
Increase Prevention and Reconciliation Act of 2005 in effect on the
date of the enactment of this Act is increased by 1.50 percentage
points.
Attest:
Secretary.
110th CONGRESS
1st Session
H. R. 3648
_______________________________________________________________________
AMENDMENT