[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5720 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 5720
To amend the Internal Revenue Code of 1986 to provide assistance for
housing.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 8, 2008
Mr. Rangel (for himself, Mr. McDermott, Mr. Lewis of Georgia, Mr.
Pomeroy, Mr. Thompson of California, Mr. Emanuel, Mr. Blumenauer, Ms.
Berkley, Mr. Crowley, Mr. Ellison, Ms. Giffords, Mr. Johnson of
Georgia, Mr. Mahoney of Florida, Mr. Rodriguez, Ms. Shea-Porter, Mr.
Sires, Mr. Welch of Vermont, and Mrs. Jones of Ohio) 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 provide assistance for
housing.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Housing Assistance
Tax Act of 2008''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--HOUSING TAX INCENTIVES
Subtitle A--Multi-Family Housing
Part 1--Low-Income Housing Tax Credit
Sec. 101. Temporary increase in volume cap for low-income housing tax
credit.
Sec. 102. Determination of credit rate.
Sec. 103. Modifications to definition of eligible basis.
Sec. 104. Other simplification and reform of low-income housing tax
incentives.
Part 2--Modifications to Tax-Exempt Housing Bond Rules
Sec. 111. Recycling of tax-exempt debt for financing residential rental
projects.
Sec. 112. Coordination of certain rules applicable to low-income
housing credit and qualified residential
rental project exempt facility bonds.
Part 3--Reforms Related to the Low-Income Housing Credit and Tax-Exempt
Housing Bonds
Sec. 121. Hold harmless for reductions in area median gross income.
Sec. 122. Exception to annual current income determination requirement
where determination not relevant.
Subtitle B--Single Family Housing
Sec. 131. First-time homebuyer credit.
Sec. 132. Additional standard deduction for real property taxes for
nonitemizers.
Subtitle C--General Provisions
Sec. 141. Temporary liberalization of tax-exempt housing bond rules.
Sec. 142. Repeal of alternative minimum tax limitations on tax-exempt
housing bonds, low-income housing tax
credit, and rehabilitation credit.
Sec. 143. Bonds guaranteed by Federal home loan banks eligible for
treatment as tax-exempt bonds.
Sec. 144. Modification of rules pertaining to FIRPTA nonforeign
affidavits.
Sec. 145. Modification of definition of tax-exempt use property for
purposes of the rehabilitation credit.
TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS
Subtitle A--Foreign Currency and Other Qualified Activities
Sec. 201. Revisions to REIT income tests.
Sec. 202. Revisions to REIT asset tests.
Sec. 203. Conforming foreign currency revisions.
Subtitle B--Taxable REIT Subsidiaries
Sec. 211. Conforming taxable REIT subsidiary asset test.
Subtitle C--Dealer Sales
Sec. 221. Holding period under safe harbor.
Sec. 222. Determining value of sales under safe harbor.
Subtitle D--Health Care REITs
Sec. 231. Conformity for health care facilities.
Subtitle E--Effective Dates
Sec. 241. Effective dates.
TITLE III--REVENUE PROVISIONS
Sec. 301. Broker reporting of customer's basis in securities
transactions.
Sec. 302. Delay in application of worldwide allocation of interest.
Sec. 303. Time for payment of corporate estimated taxes.
TITLE I--HOUSING TAX INCENTIVES
Subtitle A--Multi-Family Housing
PART 1--LOW-INCOME HOUSING TAX CREDIT
SEC. 101. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX
CREDIT.
Paragraph (3) of section 42(h) is amended by adding at the end the
following new subparagraph:
``(I) Increase in state housing credit ceiling for
2008 and 2009.--In the case of calendar years 2008 and
2009, the dollar amount in effect under subparagraph
(C)(ii)(I) for such calendar year (after any increase
under subparagraph (H)) shall be increased by $0.20.''.
SEC. 102. DETERMINATION OF CREDIT RATE.
(a) Elimination of Distinction Between New and Existing Buildings;
Minimum Credit Rate for Non-Federally Subsidized Buildings.--
(1) In general.--Subsection (b) section 42 is amended to
read as follows:
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--The term `applicable percentage' means,
with respect to any building, the appropriate percentage
prescribed by the Secretary for the earlier of--
``(A) the month in which such building is placed in
service, or
``(B) at the election of the taxpayer--
``(i) the month in which the taxpayer and
the housing credit agency enter into an
agreement with respect to such building (which
is binding on such agency, the taxpayer, and
all successors in interest) as to the housing
credit dollar amount to be allocated to such
building, or
``(ii) in the case of any building to which
subsection (h)(4)(B) applies, the month in
which the tax-exempt obligations are issued.
A month may be elected under clause (ii) only if the election
is made not later than the 5th day after the close of such
month. Such an election, once made, shall be irrevocable.
``(2) Method of prescribing percentages.--
``(A) In general.--For purposes of paragraph (1),
the percentages prescribed by the Secretary for any
month shall be--
``(i) in the case of any building which is
not federally subsidized for the taxable year,
the greater of--
``(I) 9 percent, or
``(II) the percentage which will
yield over a 10-year period amounts of
credit under subsection (a) which have
a present value equal to 70 percent of
the qualified basis of such building,
and
``(ii) in the case of any other building,
the percentage which will yield over a 10-year
period amounts of credit under subsection (a)
which have a present value equal to 30 percent
of the qualified basis of such building.
``(B) Method of discounting.--The present value
under subparagraph (A) shall be determined--
``(i) as of the last day of the 1st year of
the 10-year period referred to in subparagraph
(A),
``(ii) by using a discount rate equal to 72
percent of the average of the annual Federal
mid-term rate and the annual Federal long-term
rate applicable under section 1274(d)(1) to the
month applicable under subparagraph (A) and
compounded annually, and
``(iii) by assuming that the credit
allowable under this section for any year is
received on the last day of such year.
``(3) Cross references.--
``(A) For treatment of certain rehabilitation
expenditures as separate buildings, see subsection (e).
``(B) For determination of applicable percentage
for increases in qualified basis after the 1st year of
the credit period, see subsection (f)(3).
``(C) For authority of housing credit agency to
limit applicable percentage and qualified basis which
may be taken into account under this section with
respect to any building, see subsection (h)(7).''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(e)(3) is amended
by striking ``subsection (b)(2)(B)(ii)'' and inserting
``subsection (b)(2)(A)(ii)''.
(B) Subparagraph (A) of section 42(i)(2) is amended
by striking ``new building'' and inserting
``building''.
(b) Modifications to Definition of Federally Subsidized Building.--
(1) In general.--Subparagraph (A) of section 42(i)(2) is
amended by striking ``, or any below market Federal loan,''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(i)(2) is
amended--
(i) by striking ``balance of loan or'' in
the heading thereof,
(ii) by striking ``loan or'' in the matter
preceding clause (i), and
(iii) by striking ``subsection (d)--'' and
all that follows and inserting ``subsection (d)
the proceeds of such obligation''.
(B) Subparagraph (C) of section 42(i)(2) is
amended--
(i) by striking ``or below market Federal
loan'' in the matter preceding clause (i),
(ii) in clause (i)--
(I) by striking ``or loan (when
issued or made)'' and inserting ``(when
issued)'', and
(II) by striking ``the proceeds of
such obligation or loan'' and inserting
``the proceeds of such obligation'',
and
(iii) by striking ``, and such loan is
repaid,'' in clause (ii).
(C) Paragraph (2) of section 42(i) is amended by
striking subparagraphs (D) and (E).
(c) Effective Date.--The amendments made by this subsection shall
apply to buildings placed in service after the date of the enactment of
this Act.
SEC. 103. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.
(a) Increase in Credit for Certain State Designated Buildings.--
Subparagraph (C) of section 42(d)(5) (relating to increase in credit
for buildings in high cost areas), before redesignation under
subsection (d), is amended by adding at the end the following new
clause:
``(v) Buildings designated by state housing
credit agency.--Any building which is
designated by the State housing credit agency
as requiring the increase in credit under this
subparagraph in order for such building to be
financially feasible as part of a qualified
low-income housing project shall be treated for
purposes of this subparagraph as located in a
difficult development area which is designated
for purposes of this subparagraph. The
preceding sentence shall not apply to any
building if paragraph (1) of subsection (h)
does not apply to any portion of the eligible
basis of such building by reason of paragraph
(4) of such subsection.''.
(b) Modification to Rehabilitation Requirements.--
(1) In general.--Clause (ii) of section 42(e)(3)(A) is
amended--
(A) by striking ``10 percent'' in subclause (I) and
inserting ``20 percent'', and
(B) by striking ``$3,000'' in subclause (II) and
inserting ``$6,000''.
(2) Inflation adjustment.--Paragraph (3) of section 42(e)
is amended by adding at the end the following new subparagraph:
``(D) Inflation adjustment.--In the case of any
expenditures which are treated under paragraph (4) as
placed in service during any calendar year after 2009,
the $6,000 amount in subparagraph (A)(ii)(II) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year by substituting `calendar year
2008' for `calendar year 1992' in subparagraph
(B) thereof.
Any increase under the preceding sentence which is not
a multiple of $100 shall be rounded to the nearest
multiple of $100.''.
(3) Conforming amendment.--Subclause (II) of section
42(f)(5)(B)(ii) is amended by striking ``if subsection
(e)(3)(A)(ii)(II)'' and all that follows and inserting ``if the
dollar amount in effect under subsection (e)(3)(A)(ii)(II) were
two-thirds of such amount.''.
(c) Increase in Allowable Community Service Facility Space for
Small Projects.--Clause (ii) of section 42(d)(4)(C) (relating to
limitation) is amended by striking ``10 percent of the eligible basis
of the qualified low-income housing project of which it is a part. For
purposes of'' and inserting ``the sum of--
``(I) 15 percent of so much of the
eligible basis of the qualified low-
income housing project of which it is a
part as does not exceed $5,000,000,
plus
``(II) 10 percent of so much of the
eligible basis of such project as is
not taken into account under subclause
(I).
For purposes of''.
(d) Clarification of Treatment of Federal Grants.--Subparagraph (A)
of section 42(d)(5) is amended to read as follows:
``(A) Federal grants not taken into account in
determining eligible basis.--The eligible basis of a
building shall not include any costs financed directly
or indirectly with the proceeds of a Federally funded
grant.''.
(e) Simplification of Related Party Rules.--Clause (iii) of section
42(d)(2)(D) is amended--
(1) by striking all that precedes subclause (II),
(2) by redesignating subclause (II) as clause (iii) and
moving such clause two ems to the left, and
(3) by striking the last sentence thereof.
(f) Repeal of Deadwood.--
(1) Clause (ii) of section 42(d)(2)(B) is amended by
striking ``the later of--'' and all that follows and inserting
``the date the building was last placed in service,''.
(2) Subparagraph (D) of section 42(d)(2) is amended by
striking clause (i) and by redesignating clauses (ii) and (iii)
as clauses (i) and (ii), respectively.
(3) Paragraph (5) of section 42(d) is amended by striking
subparagraph (B) and by redesignating subparagraph (C) as
subparagraph (B).
(g) Effective Date.--The amendments made by this subsection shall
apply to buildings placed in service after the date of the enactment of
this Act.
SEC. 104. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX
INCENTIVES.
(a) Repeal Prohibition on Moderate Rehabilitation Assistance.--
Paragraph (2) of section 42(c) (defining qualified low-income building)
is amended by striking the flush sentence at the end.
(b) Modification of Time Limit for Incurring 10 Percent of
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended by
striking ``(as of the later of the date which is 6 months after the
date that the allocation was made or the close of the calendar year in
which the allocation is made)'' and inserting ``(as of the date which
is 1 year after the date that the allocation was made)''.
(c) Repeal of Bonding Requirement on Disposition of Building.--
Paragraph (6) of section 42(j) (relating to no recapture on disposition
of building (or interest therein) where bond posted) is amended to read
as follows:
``(6) No recapture on disposition of building which
continues in qualified use.--
``(A) In general.--The increase in tax under this
subsection shall not apply solely by reason of the
disposition of a building (or an interest therein) if
it is reasonably expected that such building will
continue to be operated as a qualified low-income
building for the remaining compliance period with
respect to such building.
``(B) Statute of limitations.--If a building (or an
interest therein) is disposed of during any taxable
year and there is any reduction in the qualified basis
of such building which results in an increase in tax
under this subsection for such taxable or any
subsequent taxable year, then--
``(i) the statutory period for the
assessment of any deficiency with respect to
such increase in tax shall not expire before
the expiration of 3 years from the date the
Secretary is notified by the taxpayer (in such
manner as the Secretary may prescribe) of such
reduction in qualified basis, and
``(ii) such deficiency may be assessed
before the expiration of such 3-year period
notwithstanding the provisions of any other law
or rule of law which would otherwise prevent
such assessment.''.
(d) Energy Efficiency and Historic Nature Taken Into Account in
Making Allocations.--Subparagraph (C) of section 42(m)(1) (relating to
plans for allocation of credit among projects) is amended by striking
``and'' at the end of clause (vii), by striking the period at the end
of clause (viii), and by adding at the end the following new clauses:
``(ix) the energy efficiency of the
project, and
``(x) the historic nature of the
project.''.
(e) Continued Eligibility for Students Who Received Foster Care
Assistance.--Clause (i) of section 42(i)(3)(D) is amended by striking
``or'' at the end of subclause (I), by redesignating subclause (II) as
subclause (III), and by inserting after subclause (I) the following new
subclause:
``(II) a student who was previously
under the care and placement
responsibility of the State agency
responsible for administering a plan
under part B or part E of title IV of
the Social Security Act, or''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
buildings placed in service after the date of the enactment of
this Act.
(2) Repeal of bonding requirement on disposition of
building.--The amendment made by subsection (c) shall apply
to--
(A) interests in buildings disposed after the date
of the enactment of this Act, and
(B) interests in buildings disposed of on or before
such date if--
(i) it is reasonably expected that such
building will continue to be operated as a
qualified low-income building (within the
meaning of section 42 of the Internal Revenue
Code of 1986) for the remaining compliance
period (within the meaning of such section)
with respect to such building, and
(ii) the taxpayer elects the application of
this subparagraph with respect to such
disposition.
(3) Energy efficiency and historic nature taken into
account in making allocations.--The amendments made by
subsection (d) shall apply to allocations made after December
31, 2008.
(4) Continued eligibility for students who received foster
care assistance.--The amendments made by subsection (e) shall
apply to determinations made after the date of the enactment of
this Act.
PART 2--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES
SEC. 111. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL
PROJECTS.
(a) In General.--Subsection (i) of section 146 (relating to
treatment of refunding issues) is amended by adding at the end the
following new paragraph:
``(6) Treatment of certain residential rental project bonds
as refunding bonds irrespective of obligor.--
``(A) In general.--If, during the 6-month period
beginning on the date of a repayment of a loan financed
by an issue 95 percent or more of the net proceeds of
which are used to provide projects described in section
142(d), such repayment is used to provide a new loan
for any project so described, any bond which is issued
to refinance such issue shall be treated as a refunding
issue to the extent the principal amount of such
refunding issue does not exceed the principal amount of
the bonds refunded.
``(B) Limitations.--Subparagraph (A) shall apply to
only one refunding of the original issue and only if--
``(i) the refunding issue is issued not
later than 4 years after the date on which the
original issue was issued,
``(ii) the latest maturity date of any bond
of the refunding issue is not later than 34
years after the date on which the refunded bond
was issued, and
``(iii) the refunding issue is approved in
accordance with section 147(f) before the
issuance of the refunding issue.''.
(b) Low-Income Housing Credit.--Clause (ii) of section 42(h)(4)(A)
is amended by inserting ``or such financing is refunded as described in
section 146(i)(6)'' before the period at the end.
(c) Effective Date.--The amendments made by this section shall
apply to repayments of loans received after the date of the enactment
of this Act.
SEC. 112. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME
HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL PROJECT
EXEMPT FACILITY BONDS.
(a) Determination of Next Available Unit.--Paragraph (3) of section
142(d) (relating to current income determinations) is amended by adding
at the end the following new subparagraph:
``(C) Exception for projects with respect to which
affordable housing credit is allowed.--In the case of a
project with respect to which credit is allowed under
section 42, the second sentence of subparagraph (B)
shall be applied by substituting `building (within the
meaning of section 42)' for `project'.''.
(b) Students.--Paragraph (2) of section 142(d) (relating to
definitions and special rules) is amended by adding at the end the
following new subparagraph:
``(C) Students.--Rules similar to the rules of
42(i)(3)(D) shall apply for purposes of this
subsection.''.
(c) Single-Room Occupancy Units.--Paragraph (2) of section 142(d)
(relating to definitions and special rules), as amended by this Act, is
further amended by adding at the end the following new subparagraph:
``(D) Single-room occupancy units.--A unit shall
not fail to be treated as a residential unit merely
because such unit is a single-room occupancy unit
(within the meaning of section 42).''.
(d) Effective Date.--The amendments made by this section shall
apply to determinations of the status of qualified residential rental
projects for periods beginning after the date of the enactment of this
Act, with respect to bonds issued before, on, or after such date.
PART 3--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-EXEMPT
HOUSING BONDS
SEC. 121. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.
(a) In General.--Paragraph (2) of section 142(d) is amended by
adding at the end the following new subparagraph:
``(C) Hold harmless for reductions in area median
gross income.--
``(i) In general.--Any determination of
area median gross income under subparagraph (B)
with respect to any project for any calendar
year after 2008 shall not be less than the area
median gross income determined under such
subparagraph with respect to such project for
the calendar year preceding the calendar year
for which such determination is made.
``(ii) Special rule for certain census
changes.--In the case of a HUD hold harmless
impacted project, the area median gross income
with respect to such project for any calendar
year after 2008 (hereafter in this clause
referred to as the current calendar year) shall
be the greater of the amount determined without
regard to this clause or the sum of--
``(I) the area median gross income
determined under the HUD hold harmless
policy with respect to such project for
calendar year 2008, plus
``(II) any increase in the area
median gross income determined under
subparagraph (B) (determined without
regard to the HUD hold harmless policy
and this subparagraph) with respect to
such project for the current calendar
year over the area median gross income
(as so determined) with respect to such
project for calendar year 2008.
``(iii) HUD hold harmless policy.--The term
`HUD hold harmless policy' means the
regulations under which a policy similar to the
rules of clause (i) applied to prevent a change
in the method of determining area median gross
income from resulting in a reduction in the
area median gross income determined with
respect to certain projects in calendar years
2007 and 2008.
``(iv) HUD hold harmless impacted
project.--The term `HUD hold harmless impacted
project' means any project with respect to
which area median gross income was determined
under subparagraph (B) for calendar year 2007
or 2008 if such determination would have been
less but for the HUD hold harmless policy.''.
(b) Effective Date.--The amendment made by this section shall apply
to determinations of area median gross income for calendar years after
2008.
SEC. 122. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT
WHERE DETERMINATION NOT RELEVANT.
(a) In General.--Subparagraph (A) of section 142(d)(3) is amended
by adding at the end the following new sentence: ``The preceding
sentence shall not apply with respect to any project for any year if
during such year no residential unit in the project is occupied by a
new resident whose income exceeds the applicable income limit.''
(b) Effective Date.--The amendment made by this section shall apply
to years ending after the date of the enactment of this Act.
Subtitle B--Single Family Housing
SEC. 131. FIRST-TIME HOMEBUYER CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
is amended by redesignating section 36 as section 37 and by inserting
after section 35 the following new section:
``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.
``(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 a taxable year, there shall be allowed as a credit against the
tax imposed by this subtitle for such taxable year an amount equal to
10 percent of the purchase price of the residence.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--Except as otherwise provided in
this paragraph, the credit allowed under subsection (a)
shall not exceed $7,500.
``(B) Married individuals filing separately.--In
the case of a married individual filing a separate
return, subparagraph (A) shall be applied by
substituting `$3,750' for `$7,500'.
``(C) Other individuals.--If two 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
$7,500.
``(2) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowable as a credit
under subsection (a) (determined without regard to this
paragraph) for the taxable year shall be reduced (but
not below zero) by the amount which bears the same
ratio to the amount which is so allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified
adjusted gross income for such taxable
year, over
``(II) $70,000 ($110,000 in the
case of a joint return), bears to
``(ii) $20,000.
``(B) Modified adjusted gross income.--For purposes
of subparagraph (A), the term `modified adjusted gross
income' means the adjusted gross income of the taxpayer
for the taxable year increased by any amount excluded
from gross income under section 911, 931, or 933.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--The term `first-time
homebuyer' means any individual if such individual (and if
married, such individual's spouse) had no present ownership
interest in a principal residence during the 3-year period
ending on the date of the purchase of the principal residence
to which this section applies.
``(2) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(3) Purchase.--
``(A) In general.--The term `purchase' means any
acquisition, but only if--
``(i) the property is not acquired from a
person related to the person acquiring it, and
``(ii) the basis of the property in the
hands of the person acquiring it is not
determined--
``(I) in whole or in part by
reference to the adjusted basis of such
property in the hands of the person
from whom acquired, or
``(II) under section 1014(a)
(relating to property acquired from a
decedent).
``(B) Construction.--A residence which is
constructed by the taxpayer shall be treated as
purchased by the taxpayer on the date the taxpayer
first occupies such residence.
``(4) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date such
residence is purchased.
``(5) Related persons.--A person shall be treated as
related to another person if the relationship between such
persons would result in the disallowance of losses under
section 267 or 707(b) (but, in applying section 267(b) and (c)
for purposes of this section, paragraph (4) of section 267(c)
shall be treated as providing that the family of an individual
shall include only his spouse, ancestors, and lineal
descendants).
``(d) Exceptions.--No credit under subsection (a) shall be allowed
to any taxpayer for any taxable year with respect to the purchase of a
residence if--
``(1) a credit under section 1400C (relating to first-time
homebuyer in the District of Columbia) is allowable to the
taxpayer (or the taxpayer's spouse) for such taxable year or
any prior taxable year,
``(2) the residence is financed by the proceeds of a
qualified mortgage issue the interest on which is exempt from
tax under section 103,
``(3) the taxpayer is a nonresident alien, or
``(4) the taxpayer disposes of such residence (or such
residence ceases to be the principal residence of the taxpayer
(and, if married, the taxpayer's spouse)) before the close of
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) shall not apply.
``(f) Recapture of Credit.--
``(1) In general.--Except as otherwise provided in this
subsection, if a credit under subsection (a) is allowed to a
taxpayer, the tax imposed by this chapter shall be increased by
6\2/3\ percent of the amount of such credit for each taxable
year in the recapture period.
``(2) Acceleration of recapture.--If a taxpayer disposes of
the principal residence with respect to which a credit was
allowed under subsection (a) (or such residence ceases to be
the principal residence of the taxpayer (and, if married, the
taxpayer's spouse)) before the end of the recapture period--
``(A) the tax imposed by this chapter for the
taxable year of such disposition or cessation, shall be
increased by the excess of the amount of the credit
allowed over the amounts of tax imposed by paragraph
(1) for preceding taxable years, and
``(B) paragraph (1) shall not apply with respect to
such credit for such taxable year or any subsequent
taxable year .
``(3) Limitation based on gain.--In the case of the sale of
the principal residence to a person who is not related to the
taxpayer, the increase in tax determined under paragraph (2)
shall not exceed the amount of gain (if any) on such sale.
Solely for purposes of the preceding sentence, the adjusted
basis of such residence shall be reduced by the amount of the
credit allowed under subsection (a) to the extent not
previously recaptured under paragraph (1).
``(4) Exceptions.--
``(A) Death of taxpayer.--Paragraphs (1) and (2)
shall not apply to any taxable year ending after the
date of the taxpayer's death.
``(B) Involuntary conversion.--Paragraph (2) shall
not apply in the case of a residence which is
compulsorily or involuntarily converted (within the
meaning of section 1033(a)) if the taxpayer acquires a
new principal residence during the 2-year period
beginning on the date of the disposition or cessation
referred to in paragraph (2). Paragraph (2) shall apply
to such new principal residence during the recapture
period in the same manner as if such new principal
residence were the converted residence.
``(C) Transfers between spouses or incident to
divorce.--In the case of a transfer of a residence to
which section 1041(a) applies--
``(i) paragraph (2) shall not apply to such
transfer, and
``(ii) in the case of taxable years ending
after such transfer, paragraphs (1) and (2)
shall apply to the transferee in the same
manner as if such transferee were the
transferor (and shall not apply to the
transferor).
``(5) Joint returns.--In the case of a credit allowed under
subsection (a) with respect to a joint return, half of such
credit shall be treated as having been allowed to each
individual filing such return for purposes of this subsection.
``(6) Recapture period.--For purposes of this subsection,
the term `recapture period' means the 15 taxable years
beginning with the second taxable year following the taxable
year in which the purchase of the principal residence for which
a credit is allowed under subsection (a) was made.
``(g) Application of Section.--This section shall only apply to a
principal residence purchased by the taxpayer after __, and before
April 1, 2009.''.
(b) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and'' at the
end of subparagraph (U), by striking the period and inserting
``, and'' and the end of subparagraph (V), and by inserting
after subparagraph (V) the following new subparagraph:
``(W) section 36(f) (relating to recapture of
homebuyer credit).''.
(2) Section 6211(b)(4)(A) is amended by striking `` and
35,'' and inserting ``35, 36,''.
(3) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``, 36,'' after ``section 35''.
(4) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by redesignating the item
relating to section 36 as an item relating to section 37 and by
inserting before such item the following new item:
``Sec. 36. First-time homebuyer credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to __.
SEC. 132. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR
NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard deduction) is
amended by striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``, and'', and
by adding at the end the following new subparagraph:
``(C) in the case of any taxable year beginning in
2008, the real property tax deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the end the
following new paragraph:
``(8) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is so much of
the amount of State and local real property taxes (within the
meaning of section 164) paid or accrued by the taxpayer during
the taxable year which do not exceed $350 ($700 in the case of
a joint return).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
Subtitle C--General Provisions
SEC. 141. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.
(a) Temporary Increase in Volume Cap.--
(1) In general.--Subsection (d) of section 146 is amended
by adding at the end the following new paragraph:
``(5) Increase and set aside for housing bonds for 2008.--
``(A) Increase for 2008.--In the case of calendar
year 2008, the State ceiling for each State shall be
increased by an amount equal to $10,000,000,000
multiplied by a fraction--
``(i) the numerator of which is the
population of such State, and
``(ii) the denominator of which is the
total population of all States.
``(B) Set aside.--
``(i) In general.--Any amount of the State
ceiling for any State which is attributable to
an increase under this paragraph shall be
allocated solely for one or more qualified
housing issues.
``(ii) Qualified housing issue.--For
purposes of this paragraph, the term `qualified
housing issue' means--
``(I) an issue described in section
142(a)(7) (relating to qualified
residential rental projects), or
``(II) a qualified mortgage issue
(determined by substituting `12-month
period' for `42-month period' each
place it appears in section
143(a)(2)(D)(i)).''.
(2) Carryforward of unused limitations.--Subsection (f) of
section 146 is amended by adding at the end the following new
paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--No amount which is attributable to the
increase under subsection (d)(5) may be used--
``(A) for any issue other than a qualified housing
issue (as defined in subsection (d)(5)), or
``(B) to issue any bond after calendar year
2010.''.
(b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for
Subprime Refinancing Loans.--
(1) In general.--Section 143(k) (relating to other
definitions and special rules) is amended by adding at the end
the following new paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the requirements
of subsection (i)(1), the proceeds of a qualified
mortgage issue may be used to refinance a mortgage on a
residence which was originally financed by the
mortgagor through a qualified subprime loan.
``(B) Special rules.--In applying subparagraph (A)
to any refinancing--
``(i) subsection (a)(2)(D)(i) shall be
applied by substituting `12-month period' for
`42-month period' each place it appears,
``(ii) subsection (d) (relating to 3-year
requirement) shall not apply, and
``(iii) subsection (e) (relating to
purchase price requirement) shall be applied by
using the market value of the residence at the
time of refinancing in lieu of the acquisition
cost.
``(C) Qualified subprime loan.--The term `qualified
subprime loan' means an adjustable rate single-family
residential mortgage loan made after December 31, 2001,
and before January 1, 2008, that the bond issuer
determines would be reasonably likely to cause
financial hardship to the borrower if not refinanced.
``(D) Termination.--This paragraph shall not apply
to any bonds issued after December 31, 2010.''.
(c) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 142. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT
HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND
REHABILITATION CREDIT.
(a) Tax-Exempt Interest on Certain Housing Bonds Exempted From
Alternative Minimum Tax.--
(1) In general.--Subparagraph (C) of section 57(a)(5)
(relating to specified private activity bonds) is amended by
redesignating clauses (iii) and (iv) as clauses (iv) and (v),
respectively, and by inserting after clause (ii) the following
new clause:
``(iii) Exception for certain housing
bonds.--For purposes of clause (i), the term
`private activity bond' shall not include any
bond issued after the date of the enactment of
this clause if such bond is--
``(I) an exempt facility bond
issued as part of an issue 95 percent
or more of the net proceeds of which
are to be used to provide qualified
residential rental projects (as defined
in section 142(d)),
``(II) a qualified mortgage bond
(as defined in section 143(a)), or
``(III) a qualified veterans'
mortgage bond (as defined in section
143(b)).
The preceding sentence shall not apply to any
refunding bond unless such preceding sentence
applied to the refunded bond (or in the case of
a series of refundings, the original bond).''.
(2) No adjustment to adjusted current earnings.--
Subparagraph (B) of section 56(g)(4) is amended by adding at
the end the following new clause:
``(iii) Tax exempt interest on certain
housing bonds.--Clause (i) shall not apply in
the case of any interest on a bond to which
section 57(a)(5)(C)(iii) applies.''.
(b) Allowance of Low-Income Housing Credit Against Alternative
Minimum Tax.--Subparagraph (B) of section 38(c)(4) (relating to
specified credits) is amended by redesignating clauses (ii) through
(iv) as clauses (iii) through (v) and inserting after clause (i) the
following new clause:
``(ii) the credit determined under section
42 to the extent attributable to buildings
placed in service after December 31, 2007,''.
(c) Allowance of Rehabilitation Credit Against Alternative Minimum
Tax.--Subparagraph (B) of section 38(c)(4), as amended by subsection
(b), is amended by striking ``and'' at the end of clause (iv), by
redesignating clause (v) as clause (vi), and by inserting after clause
(iv) the following new clause:
``(v) the credit determined under section
47 to the extent attributable to qualified
rehabilitation expenditures properly taken into
account for periods after December 31, 2007,
and''.
(d) Effective Date.--
(1) Housing bonds.--The amendments made by subsection (a)
shall apply to bonds issued after the date of the enactment of
this Act.
(2) Low income housing credit.--The amendments made by
subsection (b) shall apply to credits determined under section
42 of the Internal Revenue Code of 1986 to the extent
attributable to buildings placed in service after December 31,
2007.
(3) Rehabilitation credit.--The amendments made by
subsection (c) shall apply to credits determined under section
47 of the Internal Revenue Code of 1986 to the extent
attributable to qualified rehabilitation expenditures properly
taken into account for periods after December 31, 2007.
SEC. 143. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR
TREATMENT AS TAX-EXEMPT BONDS.
(a) In General.--Subparagraph (A) of section 149(b)(3) of the
Internal Revenue Code of 1986 (relating to exceptions for certain
insurance programs) is amended by striking ``or'' at the end of clause
(ii), by striking the period at the end of clause (iii) and inserting
``, or'' and by adding at the end the following new clause:
``(iv) any guarantee by a Federal home loan
bank made in connection with the original
issuance of a bond during the period beginning
on the date of the enactment of this Act and
ending on December 31, 2010 (or a renewal or
extension of a guarantee so made).''.
(b) Effective Date.--The amendments made by this section shall
apply to guarantees made after the date of the enactment of this Act.
SEC. 144. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN
AFFIDAVITS.
(a) In General.--Subsection (b) of section 1445 (relating to
exemptions) is amended by adding at the end the following:
``(9) Alternative procedure for furnishing nonforeign
affidavit.--For purposes of paragraphs (2) and (7)--
``(A) In general.--Paragraph (2) shall be treated
as applying to a transaction if, in connection with a
disposition of a United States real property interest--
``(i) the affidavit specified in paragraph
(2) is furnished to a qualified substitute, and
``(ii) the qualified substitute furnishes a
statement to the transferee stating, under
penalty of perjury, that the qualified
substitute has such affidavit in his
possession.
``(B) Regulations.--The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out this paragraph.''.
(b) Qualified Substitute.--Subsection (f) of section 1445 (relating
to definitions) is amended by adding at the end the following new
paragraph:
``(6) Qualified substitute.--The term `qualified
substitute' means, with respect to a disposition of a United
States real property interest--
``(A) the person (including any attorney or title
company) responsible for closing the transaction, other
than the transferor's agent, and
``(B) the transferee's agent.''.
(c) Exemption Not To Apply if Knowledge or Notice That Affidavit or
Statement Is False.--
(1) In general.--Paragraph (7) of section 1445(b) (relating
to special rules for paragraphs (2) and (3)) is amended to read
as follows:
``(7) Special rules for paragraphs (2), (3), and (9).--
Paragraph (2), (3), or (9) (as the case may be) shall not apply
to any disposition--
``(A) if--
``(i) the transferee or qualified
substitute has actual knowledge that the
affidavit referred to in such paragraph, or the
statement referred to in paragraph (9)(A)(ii),
is false, or
``(ii) the transferee or qualified
substitute receives a notice (as described in
subsection (d)) from a transferor's agent,
transferee's agent, or qualified substitute
that such affidavit or statement is false, or
``(B) if the Secretary by regulations requires the
transferee or qualified substitute to furnish a copy of
such affidavit or statement to the Secretary and the
transferee or qualified substitute fails to furnish a
copy of such affidavit or statement to the Secretary at
such time and in such manner as required by such
regulations.''.
(2) Liability.--
(A) Notice.--Paragraph (1) of section 1445(d)
(relating to notice of false affidavit; foreign
corporations) is amended to read as follows:
``(1) Notice of false affidavit; foreign corporations.--
If--
``(A) the transferor furnishes the transferee or
qualified substitute an affidavit described in
paragraph (2) of subsection (b) or a domestic
corporation furnishes the transferee an affidavit
described in paragraph (3) of subsection (b), and
``(B) in the case of--
``(i) any transferor's agent--
``(I) such agent has actual
knowledge that such affidavit is false,
or
``(II) in the case of an affidavit
described in subsection (b)(2)
furnished by a corporation, such
corporation is a foreign corporation,
or
``(ii) any transferee's agent or qualified
substitute, such agent or substitute has actual
knowledge that such affidavit is false,
such agent or qualified substitute shall so notify the
transferee at such time and in such manner as the
Secretary shall require by regulations.''.
(B) Failure to furnish notice.--Paragraph (2) of
section 1445(d) (relating to failure to furnish notice)
is amended to read as follows:
``(2) Failure to furnish notice.--
``(A) In general.--If any transferor's agent,
transferee's agent, or qualified substitute is required
by paragraph (1) to furnish notice, but fails to
furnish such notice at such time or times and in such
manner as may be required by regulations, such agent or
substitute shall have the same duty to deduct and
withhold that the transferee would have had if such
agent or substitute had complied with paragraph (1).
``(B) Liability limited to amount of
compensation.--An agent's or substitute's liability
under subparagraph (A) shall be limited to the amount
of compensation the agent or substitute derives from
the transaction.''.
(C) Conforming amendment.--The heading for section
1445(d) is amended by striking ``or Transferee's
Agents'' and inserting ``, Transferee's Agents, or
Qualified Substitutes''.
(d) Effective Date.--The amendments made by this section shall
apply to dispositions of United States real property interests after
the date of the enactment of this Act.
SEC. 145. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR
PURPOSES OF THE REHABILITATION CREDIT.
(a) In General.--Clause (I) of section 47(c)(2)(B)(v) is amended by
striking ``section 168(h)'' and inserting ``section 168(h), except that
`50 percent' shall be substituted for `35 percent' in paragraph
(1)(B)(iii) thereof''.
(b) Effective Date.--The amendments made by this section shall
apply to expenditures properly taken into account for periods after
December 31, 2007.
TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS
Subtitle A--Foreign Currency and Other Qualified Activities
SEC. 201. REVISIONS TO REIT INCOME TESTS.
(a) Addition of Permissible Income Categories.--Section 856(c)
(relating to limitations) is amended--
(1) by striking ``and'' at the end of paragraph (2)(G) and
by inserting after paragraph (2)(H) the following new
subparagraphs:
``(I) passive foreign exchange gains; and
``(J) any other item of income or gain as
determined by the Secretary;'', and
(2) by striking ``and'' at the end of paragraphs (3)(H) and
(3)(I) and by inserting after paragraph (3)(I) the following
new subparagraphs:
``(J) real estate foreign exchange gains; and
``(K) any other item of income or gain as
determined by the Secretary; and''.
(b) Rules Regarding Foreign Currency Transactions.--Section 856
(defining real estate investment trust) is amended by adding at the end
the following new subsection:
``(n) Rules Regarding Foreign Currency Transactions.--With respect
to any taxable year--
``(1) Real estate foreign exchange gains.--For purposes of
subsection (c)(3)(J), the term `real estate foreign exchange
gains' means--
``(A) foreign currency gains (as defined in section
988(b)(1)) which are attributable to--
``(i) any item described in subsection
(c)(3) (other than in subparagraph (J)
thereof),
``(ii) the acquisition or ownership of
obligations secured by mortgages on real
property or on interests in real property
(other than foreign currency gains attributable
to any item described in clause (i)), or
``(iii) becoming or being the obligor under
obligations secured by mortgages on real
property or on interests in real property
(other than foreign currency gains attributable
to any item described in clause (i)),
``(B) gains described in section 987 attributable
to a qualified business unit (as defined by section
989) of the real estate investment trust, but only if
such qualified business unit meets the requirements
under--
``(i) subsection (c)(3) (without regard to
subparagraph (J) thereof) for the taxable year,
and
``(ii) subsection (c)(4)(A) at the close of
each quarter that the real estate investment
trust has directly or indirectly held the
qualified business unit, and
``(C) any other foreign currency gains as
determined by the Secretary.
``(2) Passive foreign exchange gains.--For purposes of
subsection (c)(2)(I), the term `passive foreign exchange gains'
means--
``(A) real estate foreign exchange gains,
``(B) foreign currency gains (as defined in section
988(b)(1)) which are not described in subparagraph (A)
and which are attributable to any item described in
subsection (c)(2) (other than in subparagraph (I)
thereof), and
``(C) any other foreign currency gains as
determined by the Secretary.''.
(c) Addition to REIT Hedging Rule.--Subparagraph (G) of section
856(c)(5) is amended to read as follows:
``(G) Treatment of certain hedging instruments.--
Except to the extent as determined by the Secretary--
``(i) any income of a real estate
investment trust from a hedging transaction (as
defined in clause (ii) or (iii) of section
1221(b)(2)(A)) which is clearly identified
pursuant to section 1221(a)(7), including gain
from the sale or disposition of such a
transaction, shall not constitute gross income
under paragraphs (2) and (3) to the extent that
the transaction hedges any indebtedness
incurred or to be incurred by the trust to
acquire or carry real estate assets, and
``(ii) any income of a real estate
investment trust from a transaction entered
into by the trust primarily to manage risk of
currency fluctuations with respect to any item
described in paragraph (2) or (3), including
gain from the termination of such a
transaction, shall not constitute gross income
under paragraphs (2) and (3), but only if such
transaction is clearly identified as such
before the close of the day on which it was
acquired, originated, or entered into (or such
other time as the Secretary may prescribe).''.
(d) Authority To Exclude Items of Income From REIT Income Tests.--
Section 856(c)(5) is amended by adding at the end the following new
subparagraph:
``(H) Secretarial authority to exclude other items
of income.--The Secretary is authorized to determine
whether any item of income or gain which does not
otherwise qualify under paragraph (2) or (3) may be
considered as not constituting gross income solely for
purposes of this part.''.
SEC. 202. REVISIONS TO REIT ASSET TESTS.
(a) Clarification of Valuation Test.--The first sentence in the
matter following section 856(c)(4)(B)(iii)(III) is amended by inserting
``(including a discrepancy caused solely by the change in the foreign
currency exchange rate used to value a foreign asset)'' after ``such
requirements''.
(b) Clarification of Permissible Asset Category.--Section
856(c)(5), as amended by section 301(d), is amended by adding at the
end the following new subparagraph:
``(I) Cash.--The term `cash' includes foreign
currency if the real estate investment trust or its
qualified business unit (as defined in section 989)
uses such foreign currency as its functional currency
(as defined in section 985(b)).''.
SEC. 203. CONFORMING FOREIGN CURRENCY REVISIONS.
(a) Net Income From Foreclosure Property.--Clause (i) of section
857(b)(4)(B) is amended to read as follows:
``(i) gain (including any foreign currency
gain, as defined in section 988(b)(1)) from the
sale or other disposition of foreclosure
property described in section 1221(a)(1) and
the gross income for the taxable year derived
from foreclosure property (as defined in
section 856(e)), but only to the extent such
gross income is not described in (or, in the
case of foreign currency gain, not attributable
to gross income described in) section 856(c)(3)
other than subparagraph (F) thereof, over''.
(b) Net Income From Prohibited Transactions.--Clause (i) of section
857(b)(6)(B) is amended to read as follows:
``(i) the term `net income derived from
prohibited transactions' means the excess of
the gain (including any foreign currency gain,
as defined in section 988(b)(1)) from
prohibited transactions over the deductions
(including any foreign currency loss, as
defined in section 988(b)(2)) allowed by this
chapter which are directly connected with
prohibited transactions;''.
Subtitle B--Taxable REIT Subsidiaries
SEC. 211. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.
Section 856(c)(4)(B)(ii) is amended by striking ``20 percent'' and
inserting ``25 percent''.
Subtitle C--Dealer Sales
SEC. 221. HOLDING PERIOD UNDER SAFE HARBOR.
Section 857(b)(6) (relating to income from prohibited transactions)
is amended--
(1) by striking ``4 years'' in subparagraphs (C)(i),
(C)(iv), and (D)(i) and inserting ``2 years'',
(2) by striking ``4-year period'' in subparagraphs (C)(ii),
(D)(ii), and (D)(iii) and inserting ``2-year period'', and
(3) by striking ``real estate asset''and all that follows
through ``if'' in the matter preceding clause (i) of
subparagraphs (C) and (D), respectively, and inserting ``real
estate asset (as defined in section 856(c)(5)(B)) and which is
described in section 1221(a)(1) if''.
SEC. 222. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.
Section 857(b)(6) is amended--
(1) by striking the semicolon at the end of subparagraph
(C)(iii) and inserting ``, or (III) the fair market value of
property (other than sales of foreclosure property or sales to
which section 1033 applies) sold during the taxable year does
not exceed 10 percent of the fair market value of all of the
assets of the trust as of the beginning of the taxable year;'',
and
(2) by adding ``or'' at the end of subclause (II) of
subparagraph (D)(iv) and by adding at the end of such
subparagraph the following new subclause:
``(III) the fair market value of property
(other than sales of foreclosure property or
sales to which section 1033 applies) sold
during the taxable year does not exceed 10
percent of the fair market value of all of the
assets of the trust as of the beginning of the
taxable year,''.
Subtitle D--Health Care REITs
SEC. 231. CONFORMITY FOR HEALTH CARE FACILITIES.
(a) Related Party Rentals.--Subparagraph (B) of section 856(d)(8)
(relating to special rule for taxable REIT subsidiaries) is amended to
read as follows:
``(B) Exception for certain lodging facilities and
health care property.--The requirements of this
subparagraph are met with respect to an interest in
real property which is a qualified lodging facility or
a qualified health care property (as defined in
subsection (e)(6)(D)(i)) leased by the trust to a
taxable REIT subsidiary of the trust if the property is
operated on behalf of such subsidiary by a person who
is an eligible independent contractor. For purposes of
this section, a taxable REIT subsidiary is not
considered to be operating or managing a qualified
health care property or qualified lodging facility
solely because it directly or indirectly possesses a
license, permit or similar instrument enabling it to do
so.''.
(b) Eligible Independent Contractor.--Subparagraphs (A) and (B) of
section 856(d)(9) (relating to eligible independent contractor) are
amended to read as follows:
``(A) In general.--The term `eligible independent
contractor' means, with respect to any qualified
lodging facility or qualified health care property (as
defined in subsection (e)(6)(D)(i)), any independent
contractor if, at the time such contractor enters into
a management agreement or other similar service
contract with the taxable REIT subsidiary to operate
such qualified lodging facility or qualified health
care property, such contractor (or any related person)
is actively engaged in the trade or business of
operating qualified lodging facilities or qualified
health care properties, respectively, for any person
who is not a related person with respect to the real
estate investment trust or the taxable REIT subsidiary.
``(B) Special rules.--Solely for purposes of this
paragraph and paragraph (8)(B), a person shall not fail
to be treated as an independent contractor with respect
to any qualified lodging facility or qualified health
care property (as so defined) by reason of the
following:
``(i) The taxable REIT subsidiary bears the
expenses for the operation of such qualified
lodging facility or qualified health care
property pursuant to the management agreement
or other similar service contract.
``(ii) The taxable REIT subsidiary receives
the revenues from the operation of such
qualified lodging facility or qualified health
care property, net of expenses for such
operation and fees payable to the operator
pursuant to such agreement or contract.
``(iii) The real estate investment trust
receives income from such person with respect
to another property that is attributable to a
lease of such other property to such person
that was in effect as of the later of--
``(I) January 1, 1999, or
``(II) the earliest date that any
taxable REIT subsidiary of such trust
entered into a management agreement or
other similar service contract with
such person with respect to such
qualified lodging facility or qualified
health care property.''.
(c) Taxable Reit Subsidiaries.--The last sentence of section
856(l)(3) is amended--
(1) by inserting ``or a health care facility'' after ``a
lodging facility'', and
(2) by inserting ``or health care facility'' after ``such
lodging facility''.
Subtitle E--Effective Dates
SEC. 241. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided in this section, the
amendments made by this title shall apply to taxable years beginning
after the date of the enactment of this Act.
(b) REIT Income Tests.--
(1) The amendment made by section 201(a) and (b) shall
apply to gains and items of income recognized after the date of
the enactment of this Act.
(2) The amendment made by section 201(c) shall apply to
transactions entered into after the date of the enactment of
this Act.
(3) The amendment made by section 201(d) shall apply after
the date of the enactment of this Act.
(c) Conforming Foreign Currency Revisions.--
(1) The amendment made by section 203(a) shall apply to
gains recognized after the date of the enactment of this Act.
(2) The amendment made by section 203(b) shall apply to
gains and deductions recognized after the date of the enactment
of this Act.
(d) Dealer Sales.--The amendments made by subtitle C shall apply to
sales made after the date of the enactment of this Act.
TITLE III--REVENUE PROVISIONS
SEC. 301. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--
(1) Broker reporting for securities transactions.--Section
6045 (relating to returns of brokers) is amended by adding at
the end the following new subsection:
``(g) Additional Information Required in the Case of Securities
Transactions.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to the gross
proceeds of the sale of a covered security, the broker shall
include in such return the information described in paragraph
(2).
``(2) Additional information required.--
``(A) In general.--The information required under
paragraph (1) to be shown on a return with respect to a
covered security of a customer shall include the
customer's adjusted basis in such security and whether
any gain or loss with respect to such security is long-
term or short-term (within the meaning of section
1222).
``(B) Determination of adjusted basis.--For
purposes of subparagraph (A)--
``(i) In general.--The customer's adjusted
basis shall be determined--
``(I) in the case of any security
(other than any stock for which an
average basis method is permissible
under section 1012), in accordance with
the first-in first-out method unless
the customer notifies the broker by
means of making an adequate
identification of the stock sold or
transferred,
``(II) in the case of any stock for
which an average basis method is
permissible under section 1012 and
which is acquired before January 1,
2012, in accordance with any acceptable
method under section 1012 with respect
to the account in which such interest
is held, and
``(III) in the case of any stock
for which an average basis method is
permissible under section 1012 and
which is acquired after December 31,
2011, in accordance with the broker's
default method unless the customer
notifies the broker that he elects
another acceptable method under section
1012 with respect to the account in
which such interest is held.
``(ii) Exception for wash sales.--Except as
otherwise provided by the Secretary, the
customer's adjusted basis shall be determined
without regard to section 1091 (relating to
loss from wash sales of stock or securities)
unless the transactions occur in the same
account with respect to identical securities.
``(3) Covered security.--For purposes of this subsection--
``(A) In general.--The term `covered security'
means any specified security acquired on or after the
applicable date if such security--
``(i) was acquired through a transaction in
the account in which such security is held, or
``(ii) was transferred to such account from
an account in which such security was a covered
security, but only if the broker received a
statement under section 6045A with respect to
the transfer.
``(B) Specified security.--The term `specified
security' means--
``(i) any share of stock in a corporation,
``(ii) any note, bond, debenture, or other
evidence of indebtedness,
``(iii) any commodity, or contract or
derivative with respect to such commodity, if
the Secretary determines that adjusted basis
reporting is appropriate for purposes of this
subsection, and
``(iv) any other financial instrument with
respect to which the Secretary determines that
adjusted basis reporting is appropriate for
purposes of this subsection.
``(C) Applicable date.--The term `applicable date'
means--
``(i) January 1, 2010, in the case of any
specified security which is stock in a
corporation, and
``(ii) January 1, 2012, or such later date
determined by the Secretary in the case of any
other specified security.
``(4) Treatment of s corporations.--In the case of the sale
of a covered security acquired by an S corporation (other than
a financial institution) after December 31, 2011, such S
corporation shall be treated in the same manner as a
partnership for purposes of this section.
``(5) Special rules for short sales.--
``(A) In general.--In the case of a short sale,
reporting under this section shall be made for the year
in which such sale is closed.
``(B) Exception for constructive sales.--
Subparagraph (A) shall not apply to any short sale
which results in a constructive sale under section 1259
with respect to property held in the account in which
the short sale is entered into.''.
(2) Broker information required with respect to options.--
Section 6045, as amended by subsection (a), is amended by
adding at the end the following new subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this section, in
the case of any exercise of an option on a covered security
where the option was granted or acquired in the same account as
the covered security, the amount received or paid with respect
to such exercise shall be treated as an adjustment to gross
proceeds or as an adjustment to basis, as the case may be.
``(2) Lapse or closing transaction.--For purposes of this
section, in the case of the lapse (or closing transaction (as
defined in section 1234(b)(2)(A))) of an option on a specified
security where the taxpayer is the grantor of the option, this
section shall apply as if the premium received for such option
were gross proceeds received on the date of the lapse or
closing transaction, and the cost (if any) of the closing
transaction shall be taken into account as adjusted basis. In
the case of an option on a specified security where the
taxpayer is the grantee of such option, this section shall
apply as if the grantee received gross proceeds of zero on the
date of the lapse.
``(3) Prospective application.--Paragraphs (1) and (2)
shall not apply to any option which is granted or acquired
before January 1, 2012.
``(4) Definitions.--For purposes of this subsection, the
terms `covered security' and `specified security' shall have
the meanings given such terms in subsection (g)(3).''.
(3) Extension of period for statements sent to customers.--
(A) In general.--Subsection (b) of section 6045 is
amended by striking ``January 31'' and inserting
``February 15''.
(B) Statements related to substitute payments.--
Subsection (d) of section 6045 is amended--
(i) by striking ``at such time and'', and
(ii) by inserting after ``other item.'' the
following new sentence: ``The written statement
required under the preceding sentence shall be
furnished on or before February 15 of the year
following the calendar year in which the
payment was made.''.
(C) Other statements.--Subsection (b) of section
6045 is amended by adding at the end the following:
``In the case of a consolidated reporting statement (as
defined in regulations) with respect to any account
which includes the statement required by this
subsection, any statement which would otherwise be
required to be furnished on or before January 31 of a
calendar year under section 6042(c), 6049(c)(2)(A), or
6050N(b) with respect to any item in such account shall
instead be required to be furnished on or before
February 15 of such calendar year if furnished as part
of such consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account by
Account or Average Basis Method.--Section 1012 (relating to basis of
property-cost) is amended--
(1) by striking ``The basis of property'' and inserting the
following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and inserting
the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The cost of
real property'', and
(3) by adding at the end the following new subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange, or
other disposition of a specified security on or after the
applicable date, the conventions prescribed by regulations
under this section shall be applied on an account by account
basis.
``(2) Application to open-end funds.--
``(A) In general.--Except as provided in
subparagraph (B), any stock in an open-end fund
acquired before January 1, 2010, shall be treated as a
separate account from any such stock acquired on or
after such date.
``(B) Election by open-end fund for treatment as
single account.--If an open-end fund elects to have
this subparagraph apply with respect to one or more of
its stockholders--
``(i) subparagraph (A) shall not apply with
respect to any stock in such fund held by such
stockholders, and
``(ii) all stock in such fund which is held
by such stockholders shall be treated as
covered securities described in section
6045(g)(3) without regard to the date of the
acquisition of such stock.
A rule similar to the rule of the preceding sentence
shall apply with respect to a broker holding stock in
an open-end fund as a nominee.
``(3) Definitions.--For purposes of this section--
``(A) Open-end fund.--The term `open-end fund'
means a regulated investment company (as defined in
section 851) which is offering for sale or has
outstanding any redeemable security of which it is the
issuer and the shares of which are not traded on an
established securities exchange.
``(B) Specified security; applicable date.--The
terms `specified security' and `applicable date' shall
have the meaning given such terms in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a Dividend
Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired after
December 31, 2009, in connection with a dividend reinvestment
plan, the basis of such stock shall be determined using one of
the methods which may be used for determining the basis of
stock in an open-end fund.
``(2) Separate accounts; election for treatment as single
account.--Rules similar to the rules of subsection (c)(2) shall
apply for purposes of this subsection.
``(3) Dividend reinvestment plan.--For purposes of this
subsection--
``(A) In general.--The term `dividend reinvestment
plan' means any arrangement under which dividends on
any stock are reinvested in stock identical to the
stock with respect to which the dividends are paid.
``(B) Initial stock acquisition treated as acquired
in connection with plan.--Stock shall be treated as
acquired in connection with a dividend reinvestment
plan if such stock is acquired pursuant to such plan or
if the dividends paid on such stock are subject to such
plan.''.
(c) Information by Transferors T Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by inserting after section 6045 the
following new section:
``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF
COVERED SECURITIES TO BROKERS.
``(a) Furnishing of Information.--Every applicable person which
transfers to a broker (as defined in section 6045(c)(1)) a security
which is a covered security (as defined in section 6045(g)(3)) in the
hands of such applicable person shall furnish to such broker a written
statement in such manner and setting forth such information as the
Secretary may by regulations prescribe for purposes of enabling such
broker to meet the requirements of section 6045(g).
``(b) Applicable Person.--For purposes of subsection (a), the term
`applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)), and
``(2) any other person as provided by the Secretary in
regulations.
``(c) Time for Furnishing Statement.--Except as otherwise provided
by the Secretary, any statement required by subsection (a) shall be
furnished on the date of the transfer described in such subsection.''.
(2) Assessable penalties.--Paragraph (2) of section 6724(d)
(defining payee statement) is amended by redesignating
subparagraphs (I) through (CC) as subparagraphs (J) through
(DD), respectively, and by inserting after subparagraph (H) the
following new subparagraph:
``(I) section 6045A (relating to information
required in connection with transfers of covered
securities to brokers).''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6045 the following
new item:
``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.
(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986, as amended by
subsection (b), is amended by inserting after section 6045A the
following new section:
``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED
SECURITIES.
``(a) In General.--According to the forms or regulations prescribed
by the Secretary, any issuer of a specified security shall make a
return setting forth--
``(1) a description of any organizational action which
affects the basis of such specified security of such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by subsection
(a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described in
subsection (a), or
``(2) January 15 of the year following the calendar year
during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified Securities
or Their Nominees.--According to the forms or regulations prescribed by
the Secretary, every person required to make a return under subsection
(a) with respect to a specified security shall furnish to the nominee
with respect to the specified security (or certificate holder if there
is no nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such return,
``(2) the information required to be shown on such return
with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence shall be
furnished to the holder on or before January 15 of the year following
the calendar year during which the action described in subsection (a)
occurred.
``(d) Specified Security.--For purposes of this section, the term
`specified security' has the meaning given such term by section
6045(g)(3)(B). No return shall be required under this section with
respect to actions described in subsection (a) with respect to a
specified security which occur before the applicable date (as defined
in section 6045(g)(3)(C)) with respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary may waive
the requirements under subsections (a) and (c) with respect to a
specified security, if the person required to make the return under
subsection (a) makes publicly available, in such form and manner as the
Secretary determines necessary to carry out the purposes of this
section--
``(1) the name, address, phone number, and email address of
the information contact of such person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such
Code (defining information return) is amended by
redesignating clauses (iv) through (xix) as clauses (v)
through (xx), respectively, and by inserting after
clause (iii) the following new clause:
``(iv) section 6045B(a) (relating to
returns relating to actions affecting basis of
specified securities),''.
(B) Paragraph (2) of section 6724(d) of such Code
(defining payee statement), as amended by subsection
(c)(2), is amended by redesignating subparagraphs (J)
through (DD) as subparagraphs (K) through (EE),
respectively, and by inserting after subparagraph (I)
the following new subparagraph:
``(J) subsections (c) and (e) of section 6045B
(relating to returns relating to actions affecting
basis of specified securities).''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 of such Code, as
amended by subsection (b)(3), is amended by inserting after the
item relating to section 6045A the following new item:
``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2010.
(2) Extension of period for statements sent to customers.--
The amendments made by subsection (a)(3) shall apply to
statements required to be furnished after December 31, 2008.
SEC. 302. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are
each amended by striking ``December 31, 2008'' and inserting ``December
31, 2009''.
(b) Transitional Rule.--Subsection (f) of section 864 is amended by
adding at the end the following new paragraph:
``(7) Transition.--In the case of the first taxable year to
which this subsection applies, the increase (if any) in the
amount of the interest expense allocable to sources within the
United States by reason of the application of this subsection
shall be 90 percent of the amount of such increase determined
without regard to this paragraph.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 303. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of section
401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is
amended by striking the percentage contained therein and inserting
``100 percent''.
(b) Modification of Adjustment for 2013.--The percentage under
subparagraph (C) 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 13 percentage points.
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