Credit for certain home purchases

(a)

Allowance of credit

Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 25D the following new section:

25E.

Credit for certain home purchases

(a)

Allowance of credit

In the case of an individual who purchases a principal residence in the United States during the 12-month period beginning on the date of the enactment of this section, there shall be allowed to the taxpayer as a credit against the tax imposed by this chapter for the taxable year an amount equal to so much of the purchase price of the residence as does not exceed $10,000. (b)

Limitations

(1)

Conforming loan limitation

Subsection (a) shall not apply with respect to any residence the value of which exceeds the limitation for the area in which the residence is located on the maximum original principal obligation of a mortgage that may be purchased by the Federal Home Loan Mortgage Corporation, as in effect for 2008 pursuant to section 201(a)(2) of the Economic Stimulus Act of 2008. (2)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under this subpart (other than this section) for the taxable year. (3)

One-time only

(A)

In general

If a credit is allowed under this section in the case of any individual (and such individual’s spouse, if married) with respect to the purchase of any principal residence, no credit shall be allowed under this section in any taxable year with respect to the purchase of any other principal residence by such individual or a spouse of such individual. (B)

Joint purchase

In the case of a purchase of a principal residence by 2 or more unmarried individuals or by 2 married individuals filing separately, no credit shall be allowed under this section if a credit under this section has been allowed to any of such individuals in any taxable year with respect to the purchase of any other principal residence. (c)

Principal residence

The term principal residence has the same meaning as when used in section 121. (d)

Denial of double benefit

No credit shall be allowed under this section for any purchase for which a credit is allowed under section 1400C. (e)

Special rules

For purposes of this section— (1)

Joint purchase by unmarried individuals

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 $10,000. (2)

Purchase

In defining the purchase of a principal residence, rules similar to the rules of paragraphs (2) and (3) of section 1400C(e) (as in effect on the date of the enactment of this section) shall apply. (3)

Reporting requirement

Rules similar to the rules of section 1400C(f) (as so in effect) shall apply. (f)

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. (g)

Application

This section shall not apply to any taxable year beginning after December 31, 2009.

(b)

Clerical amendment

The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25D the following new item:

Sec. 25E. Credit for certain home purchases.

(c)

Effective date

The amendments made by this section shall apply with respect to residences purchased after the date of the enactment of this Act in taxable years ending after such date.