110 HR 5720 IH: Housing Assistance Tax Act of 2008
U.S. House of Representatives
2008-04-08
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.
(a)This Act may be cited as the Housing Assistance Tax Act of 2008
.
(b)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)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.
<enum>I</enum><header>Housing tax incentives</header>
<subtitle id="HF46DB86170D7435383435549E98DD97E"><enum>A</enum><header>Multi-family housing</header>
<part id="HCB8FA3B9E01E47AD949C16D7F5D9B6F1"><enum>1</enum><header>Low-income housing tax credit</header>
<section display-inline="no-display-inline" id="HD0B7794BFE6E49B78F888DE7A69DAF91" section-type="subsequent-section"><enum>101.</enum><header>Temporary increase in volume cap for low-income housing tax credit</header><text display-inline="no-display-inline">Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(h)</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H61450F68FA1C49C49D1BC7A6EC5091D1" style="OLC">
<subparagraph id="H8BA31E8B51B44DD08104D84CC6F31EA1"><enum>(I)</enum><header>Increase in State housing credit ceiling for 2008 and 2009</header><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H9BF3A590D9634879B5679FDE006E8BD8"><enum>102.</enum><header>Determination of credit rate</header>
<subsection display-inline="no-display-inline" id="HEF2CF9AAC7FF4C0999EBA8B7F542554D"><enum>(a)</enum><header>Elimination of distinction between new and existing buildings; minimum credit rate for non-federally subsidized buildings</header>
<paragraph id="HD86A2E356F8E46838C12806B007D33DC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HBDD440924DCD4398841B4362C8BEBD62" style="OLC">
<subsection id="H37EFBEA1D4914D0C8512185150C68529"><enum>(b)</enum><header>Applicable percentage</header><text>For purposes of this section—</text>
<paragraph id="HEC470107E5B147BFA5C2A7495D22EC63"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>applicable percentage</term> means, with respect to any building, the appropriate percentage prescribed by the Secretary for the earlier of—</text>
<subparagraph id="H20AA1C168D7C48AABDC4DFC33671CAD0"><enum>(A)</enum><text>the month in which such building is placed in service, or</text> </subparagraph>
<subparagraph id="H7964CBA10B1547F78CC47CEF5CA5E193"><enum>(B)</enum><text>at the election of the taxpayer—</text>
<clause id="HC58F6A3906F44B62812E8BA019280823"><enum>(i)</enum><text>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</text> </clause>
<clause id="H6CFFC97A52164CE5AE9929BC7B8E706E"><enum>(ii)</enum><text>in the case of any building to which subsection (h)(4)(B) applies, the month in which the tax-exempt obligations are issued.</text> </clause></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H5BC56FEDF8EB41E48C79000034E1A85F"><enum>(2)</enum><header>Method of prescribing percentages</header>
<subparagraph id="H4B1209DBDB5E4CA395DC00025F0663D3"><enum>(A)</enum><header>In general</header><text>For purposes of paragraph (1), the percentages prescribed by the Secretary for any month shall be—</text>
<clause id="HB13950DE7E9A4D89B0A9006BD3483FD9"><enum>(i)</enum><text>in the case of any building which is not federally subsidized for the taxable year, the greater of—</text>
<subclause id="H1186D49F4AAE4A8F8F7FFB108BB13DC"><enum>(I)</enum><text>9 percent, or</text> </subclause>
<subclause id="H0D748167350D470894EC31A1FD03E0F3"><enum>(II)</enum><text>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</text> </subclause></clause>
<clause id="HF9F2E885FDF4432398A825AD5B5E2DCB"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H3FAC675BD34A4F83A73978BAF3F798EE"><enum>(B)</enum><header>Method of discounting</header><text>The present value under subparagraph (A) shall be determined—</text>
<clause id="H55B69EAC808A4044A6055E6537D9A5FB"><enum>(i)</enum><text>as of the last day of the 1st year of the 10-year period referred to in subparagraph (A),</text> </clause>
<clause id="HCC87B7FE9A6C40689C1DC866F3C86C1"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H13B338AFDF334D278EA2F6E63E6C67B"><enum>(iii)</enum><text>by assuming that the credit allowable under this section for any year is received on the last day of such year.</text> </clause></subparagraph></paragraph>
<paragraph id="HD34FEE6DCA344C2BBC6B00000524BDBE"><enum>(3)</enum><header>Cross references</header>
<subparagraph id="H9A27A5B266584927A6FFB9E494BDBE6D"><enum>(A)</enum><text display-inline="yes-display-inline">For treatment of certain rehabilitation expenditures as separate buildings, see subsection (e).</text> </subparagraph>
<subparagraph id="H9E5C1E29AEB9494FA65C6744BDA0138"><enum>(B)</enum><text>For determination of applicable percentage for increases in qualified basis after the 1st year of the credit period, see subsection (f)(3).</text> </subparagraph>
<subparagraph id="H410D04A567304DC3ACC2D7FB6511F62"><enum>(C)</enum><text display-inline="yes-display-inline">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).</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H05E2953FEC3541029F27B77C8800503B"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="HFF7D939024C9486D93001188DF175313"><enum>(A)</enum><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(e)(3)</external-xref> is amended by striking <quote>subsection (b)(2)(B)(ii)</quote> and inserting <quote>subsection (b)(2)(A)(ii)</quote>.</text> </subparagraph>
<subparagraph id="HF623BE2F575C41F7A78FAF6029A78E00"><enum>(B)</enum><text>Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(i)(2)</external-xref> is amended by striking <quote>new building</quote> and inserting <quote>building</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H3F7F0A805786483D8670B574B54F19CF"><enum>(b)</enum><header>Modifications to definition of Federally subsidized building</header>
<paragraph id="HFAC4E3F6741E4CA58200C2C3A37EA3F4"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(i)(2)</external-xref> is amended by striking <quote>, or any below market Federal loan,</quote>.</text> </paragraph>
<paragraph id="H1F447B7C00BD4A09A3B8B1F2BD49E37"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph commented="no" id="H0FDF72CDC3D04E3C8E8E69223E87E359"><enum>(A)</enum><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(i)(2)</external-xref> is amended—</text>
<clause commented="no" id="HDEC646AC3AAB4F9F85726BCBD4D573C3"><enum>(i)</enum><text>by striking <quote><header-in-text level="subparagraph" style="OLC">balance of loan or</header-in-text></quote> in the heading thereof,</text> </clause>
<clause commented="no" id="H2C7E14B297B84D008DB4F8C6F860A9CE"><enum>(ii)</enum><text>by striking <quote>loan or</quote> in the matter preceding clause (i), and</text> </clause>
<clause commented="no" id="HF1A048B5E1414A608191A9E05A0AC00"><enum>(iii)</enum><text display-inline="yes-display-inline">by striking <quote>subsection (d)—</quote> and all that follows and inserting <quote>subsection (d) the proceeds of such obligation</quote>.</text> </clause></subparagraph>
<subparagraph id="H4B23C8AAB3594E33A2D9173107D19253"><enum>(B)</enum><text>Subparagraph (C) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(i)(2)</external-xref> is amended—</text>
<clause id="HD9D26A09F4AC430F96E0988158C3B2C"><enum>(i)</enum><text>by striking <quote>or below market Federal loan</quote> in the matter preceding clause (i),</text> </clause>
<clause id="H5CFEC046215F4B3DAF77B7E2E45BFAF8"><enum>(ii)</enum><text>in clause (i)—</text>
<subclause id="HFDC1F2E32A9B42D7B1DF7BF2E4DD16E"><enum>(I)</enum><text>by striking <quote>or loan (when issued or made)</quote> and inserting <quote>(when issued)</quote>, and</text> </subclause>
<subclause id="H5068B2227CB44D4B849B22703B75E579"><enum>(II)</enum><text>by striking <quote>the proceeds of such obligation or loan</quote> and inserting <quote>the proceeds of such obligation</quote>, and</text> </subclause></clause>
<clause id="H331F8174207B4F34B6BE26A7206F4E0"><enum>(iii)</enum><text>by striking <quote>, and such loan is repaid,</quote> in clause (ii).</text> </clause></subparagraph>
<subparagraph id="H7CD95AB5B636458EA40456AA88E58B92"><enum>(C)</enum><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(i)</external-xref> is amended by striking subparagraphs (D) and (E).</text> </subparagraph></paragraph></subsection>
<subsection id="HA9ADD8B250084AC397D9003703BFC51B"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this subsection shall apply to buildings placed in service after the date of the enactment of this Act.</text> </subsection></section>
<section id="H50D202A624694FBBB4E4B5B45BAFD142"><enum>103.</enum><header>Modifications to definition of eligible basis</header>
<subsection id="H9996C8A9189F42D78297FEFC2BDF493C"><enum>(a)</enum><header>Increase in credit for certain State designated buildings</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HBD886BE297664EB3BE00453C1FA064AD" style="OLC">
<clause id="H9BF7C07FBF6C439C9106BE50D63C404B"><enum>(v)</enum><header>Buildings designated by State housing credit agency</header><text display-inline="yes-display-inline">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.</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="HF49E49686B0E40D792868130B9512000"><enum>(b)</enum><header>Modification to rehabilitation requirements</header>
<paragraph id="H0B39F8511D11436680D7F7D2EBB25FDC"><enum>(1)</enum><header>In general</header><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(e)(3)(A)</external-xref> is amended—</text>
<subparagraph id="HBBCA0C667FDC4BC1B216777FA862E43C"><enum>(A)</enum><text>by striking <quote>10 percent</quote> in subclause (I) and inserting <quote>20 percent</quote>, and</text> </subparagraph>
<subparagraph id="H974D0CC2B3A6412985AE12FEC900D9AB"><enum>(B)</enum><text>by striking <quote>$3,000</quote> in subclause (II) and inserting <quote>$6,000</quote>.</text> </subparagraph></paragraph>
<paragraph id="H63F6D2B7370546449CEFF29320D36970"><enum>(2)</enum><header>Inflation adjustment</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(e)</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HAE38045514A94B5E84DF7EBFE750FED7" style="OLC">
<subparagraph id="HC91C1CDC04A04727974F17A2FED5D2C8"><enum>(D)</enum><header>Inflation adjustment</header><text display-inline="yes-display-inline">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—</text>
<clause id="H3D5C56F338874F8F98AC281759A212DA"><enum>(i)</enum><text>such dollar amount, multiplied by</text> </clause>
<clause id="HF7AE30F9909646E1B4E28C6B66E2BFB0"><enum>(ii)</enum><text>the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting <quote>calendar year 2008</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof.</text> </clause><continuation-text continuation-text-level="subparagraph">Any increase under the preceding sentence which is not a multiple of $100 shall be rounded to the nearest multiple of $100.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H71E1DFE0F08C49AFB82BE3262DD7C02"><enum>(3)</enum><header>Conforming amendment</header><text>Subclause (II) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(f)(5)(B)(ii)</external-xref> is amended by striking <quote>if subsection (e)(3)(A)(ii)(II)</quote> and all that follows and inserting <quote>if the dollar amount in effect under subsection (e)(3)(A)(ii)(II) were two-thirds of such amount.</quote>.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H7311C21C5F6142ABABB446F0FB22D81"><enum>(c)</enum><header>Increase in allowable community service facility space for small projects</header><text display-inline="yes-display-inline">Clause (ii) of section 42(d)(4)(C) (relating to limitation) is amended by striking <quote>10 percent of the eligible basis of the qualified low-income housing project of which it is a part. For purposes of</quote> and inserting</text>
<quoted-block display-inline="yes-display-inline" id="H9153B22D6D3D4F46BECA6E9629B6E781" style="OLC"> <text>the sum of—</text>
<subclause id="HB2B345325C7144CFB5CA4517DB8EE44"><enum>(I)</enum><text display-inline="yes-display-inline">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</text> </subclause>
<subclause id="HE9550A0411DF4B5CBB35691E00D87500"><enum>(II)</enum><text>10 percent of so much of the eligible basis of such project as is not taken into account under subclause (I).</text> </subclause>
<quoted-block-continuation-text quoted-block-continuation-text-level="clause">For purposes of</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC37C91107A0A4BD5B7BB6F5555263535"><enum>(d)</enum><header>Clarification of treatment of Federal grants</header><text>Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(d)(5)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HF48EC5C0D77A4E2E003E42ADF37F4DB6" style="OLC">
<subparagraph id="H4D99FDDA09C24AAEA1E73E7425D62E19"><enum>(A)</enum><header>Federal grants not taken into account in determining eligible basis</header><text display-inline="yes-display-inline">The eligible basis of a building shall not include any costs financed directly or indirectly with the proceeds of a Federally funded grant.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H380A522F5DC740A3A5001D6F6948503E"><enum>(e)</enum><header>Simplification of related party rules</header><text>Clause (iii) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(d)(2)(D)</external-xref> is amended—</text>
<paragraph id="HC94B47B5579647059CA92F13D0531195"><enum>(1)</enum><text>by striking all that precedes subclause (II),</text> </paragraph>
<paragraph id="H6617FA0EF7044D78A4DFA6BAD9414D00"><enum>(2)</enum><text>by redesignating subclause (II) as clause (iii) and moving such clause two ems to the left, and</text> </paragraph>
<paragraph id="HB26065A9CA15477DB65BC14369C05801"><enum>(3)</enum><text>by striking the last sentence thereof.</text> </paragraph></subsection>
<subsection id="H380FE94397A642C8BCD16E718FD4916B"><enum>(f)</enum><header>Repeal of deadwood</header>
<paragraph id="HAB52C5B3FE3E4C85B5A4039E39046583"><enum>(1)</enum><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(d)(2)(B)</external-xref> is amended by striking <quote>the later of—</quote> and all that follows and inserting <quote>the date the building was last placed in service,</quote>.</text> </paragraph>
<paragraph id="H7FBCD1BE704C403C008154DE1DC9BCF5"><enum>(2)</enum><text display-inline="yes-display-inline">Subparagraph (D) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(d)(2)</external-xref> is amended by striking clause (i) and by redesignating clauses (ii) and (iii) as clauses (i) and (ii), respectively.</text> </paragraph>
<paragraph id="H11B622B61D21411D93BAE753D696C773"><enum>(3)</enum><text>Paragraph (5) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(d)</external-xref> is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B).</text> </paragraph></subsection>
<subsection id="HE6D963881C7A47DDB7CBC3DDD002752F"><enum>(g)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this subsection shall apply to buildings placed in service after the date of the enactment of this Act.</text> </subsection></section>
<section id="HCEC11A0E0DE141CBBF76F38EB6E767B"><enum>104.</enum><header>Other simplification and reform of low-income housing tax incentives</header>
<subsection display-inline="no-display-inline" id="H7C7C53D60349400C80860152352E0701"><enum>(a)</enum><header>Repeal prohibition on moderate rehabilitation assistance</header><text display-inline="yes-display-inline">Paragraph (2) of section 42(c) (defining qualified low-income building) is amended by striking the flush sentence at the end.</text> </subsection>
<subsection id="HAC4C64C9F2974B829F8500DD72DB5C61"><enum>(b)</enum><header>Modification of time limit for incurring 10 percent of project’s cost</header><text display-inline="yes-display-inline">Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(h)(1)(E)</external-xref> is amended by striking <quote>(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)</quote> and inserting <quote>(as of the date which is 1 year after the date that the allocation was made)</quote>.</text> </subsection>
<subsection id="H36F1DD2421D947ADAAC87D429927CDC9"><enum>(c)</enum><header>Repeal of bonding requirement on disposition of building</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HD8DD8C3B5EC74E0BBD1064B2F5E069E0" style="OLC">
<paragraph id="HE4B3FFFA68FB47AC8183952BFDF9E9B"><enum>(6)</enum><header>No recapture on disposition of building which continues in qualified use</header>
<subparagraph id="H7B498CE9DDA7401FAD00701890E632A6"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H0EA855754F934E90002399153F515200"><enum>(B)</enum><header>Statute of limitations</header><text>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—</text>
<clause id="H020A01265CBA4FC1A6DDEFCC391535E6"><enum>(i)</enum><text>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</text> </clause>
<clause id="H07ACBEF880604B5F8EC45E2FE2F3F600"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H3D093D42ACE64EA683D542BDF9F600BA"><enum>(d)</enum><header>Energy efficiency and historic nature taken into account in making allocations</header><text>Subparagraph (C) of section 42(m)(1) (relating to plans for allocation of credit among projects) is amended by striking <quote>and</quote> 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:</text>
<quoted-block display-inline="no-display-inline" id="H71743EADDD174AC580C0A86900B72DF7" style="OLC">
<clause id="HE05CE5B848A2400AACFB2FDED5A22C3C"><enum>(ix)</enum><text display-inline="yes-display-inline">the energy efficiency of the project, and</text> </clause>
<clause id="H8FB75DB2F5C4437EAF9C1E001400213B"><enum>(x)</enum><text>the historic nature of the project.</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H1CE44AEEEE0F4D6682CC8FE4027906B3"><enum>(e)</enum><header>Continued eligibility for students who received foster care assistance</header><text>Clause (i) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(i)(3)(D)</external-xref> is amended by striking <quote>or</quote> at the end of subclause (I), by redesignating subclause (II) as subclause (III), and by inserting after subclause (I) the following new subclause:</text>
<quoted-block display-inline="no-display-inline" id="HD4CF8FC97BF948C88F8DC43EC8EB478C" style="OLC">
<subclause id="HDAAE1A32DEFC4A02BD5D10DB785C4DF9"><enum>(II)</enum><text display-inline="yes-display-inline">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</text> </subclause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H10E94B76B8D946A200A5A52D46207E5B"><enum>(f)</enum><header>Effective date</header>
<paragraph id="HF7D366511C78422889E78FEE000022FD"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H9725D7471A174C76AA56C2E3D8049434"><enum>(2)</enum><header>Repeal of bonding requirement on disposition of building</header><text>The amendment made by subsection (c) shall apply to—</text>
<subparagraph id="HB28F73369C8E4F8E95B8F9D7EA4E6054"><enum>(A)</enum><text>interests in buildings disposed after the date of the enactment of this Act, and</text> </subparagraph>
<subparagraph id="H2E9D06E295724C28A22F202DA24CD92B"><enum>(B)</enum><text>interests in buildings disposed of on or before such date if—</text>
<clause id="H6B846B3047454934B2F78F6437289254"><enum>(i)</enum><text>it is reasonably expected that such building will continue to be operated as a qualified low-income building (within the meaning of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42</external-xref> of the Internal Revenue Code of 1986) for the remaining compliance period (within the meaning of such section) with respect to such building, and</text> </clause>
<clause id="H0F1FBAF7385E46A0809605D385CC5E00"><enum>(ii)</enum><text>the taxpayer elects the application of this subparagraph with respect to such disposition.</text> </clause></subparagraph></paragraph>
<paragraph id="HF7204A893A7B4ADC83DC7EEDEA14F794"><enum>(3)</enum><header>Energy efficiency and historic nature taken into account in making allocations</header><text>The amendments made by subsection (d) shall apply to allocations made after December 31, 2008.</text> </paragraph>
<paragraph id="H5C2ED39D29C940C197D0603B76ADD792"><enum>(4)</enum><header>Continued eligibility for students who received foster care assistance</header><text>The amendments made by subsection (e) shall apply to determinations made after the date of the enactment of this Act.</text> </paragraph></subsection></section></part>
<part id="H9D0F26FED6E749DAA6E3B2552D02A121"><enum>2</enum><header>Modifications to tax-exempt housing bond rules</header>
<section id="HA8C8415AB4624CD1A37E7CE5B4E4D82C"><enum>111.</enum><header>Recycling of tax-exempt debt for financing residential rental projects</header>
<subsection id="H0A7ABCF7C46B447882C621D6341F49CC"><enum>(a)</enum><header>In general</header><text>Subsection (i) of section 146 (relating to treatment of refunding issues) is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H050AE1FE27D642F680542209F8CCC854" style="OLC">
<paragraph id="H49EA84EA620A434DA65448CF7D00FCA7"><enum>(6)</enum><header>Treatment of certain residential rental project bonds as refunding bonds irrespective of obligor</header>
<subparagraph id="H8E3825712E3C42FBB4DA4D3360FC8171"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HCE4795CCBD114A5DB40068ECE6E2DB76"><enum>(B)</enum><header>Limitations</header><text>Subparagraph (A) shall apply to only one refunding of the original issue and only if—</text>
<clause id="H65249F71FE874DF9A3B46345548DA595"><enum>(i)</enum><text>the refunding issue is issued not later than 4 years after the date on which the original issue was issued,</text> </clause>
<clause id="HBBD6A7C6841F494E90EDC6C996B6BBC"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H13BC6612A9844871A0E6C8C7B317000"><enum>(iii)</enum><text>the refunding issue is approved in accordance with section 147(f) before the issuance of the refunding issue.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HF922AE017BD54FE7AC91A718B032D1AD"><enum>(b)</enum><header>Low-income housing credit</header><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(h)(4)(A)</external-xref> is amended by inserting <quote>or such financing is refunded as described in section 146(i)(6)</quote> before the period at the end.</text> </subsection>
<subsection id="H77A8BF77A67244BA8223361D4D847FDA"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to repayments of loans received after the date of the enactment of this Act.</text> </subsection></section>
<section id="H4D9BA1744DA74318B7EB2293DFE9087C"><enum>112.</enum><header>Coordination of certain rules applicable to low-income housing credit and qualified residential rental project exempt facility bonds</header>
<subsection id="H2C1E4267A137429890C7A842E349C66D"><enum>(a)</enum><header>Determination of next available unit</header><text>Paragraph (3) of section 142(d) (relating to current income determinations) is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H4F3AC37BCB174A52BEBD4EAEF6294FC" style="OLC">
<subparagraph id="H1F9C6A62B97449EDBC62BFFB799300F1"><enum>(C)</enum><header>Exception for projects with respect to which affordable housing credit is allowed</header><text>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 <quote>building (within the meaning of section 42)</quote> for <quote>project</quote>.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H9293F135ADA8429A00B0A2B612FEF3C"><enum>(b)</enum><header>Students</header><text>Paragraph (2) of section 142(d) (relating to definitions and special rules) is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HF8D268ABF199456FACC39526BD06E382" style="OLC">
<subparagraph id="H09D68E0DCD3E44D294FFDEAED9EC7FF4"><enum>(C)</enum><header>Students</header><text display-inline="yes-display-inline">Rules similar to the rules of 42(i)(3)(D) shall apply for purposes of this subsection.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HDCE7553234EC44770088D1CEBDFF5D9E"><enum>(c)</enum><header>Single-room occupancy units</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H623566F7885F4E1CB000C9AF3CBD4D3" style="OLC">
<subparagraph id="HA335FB2E0AD04FD598BD54BC18CAF2C1"><enum>(D)</enum><header>Single-room occupancy units</header><text display-inline="yes-display-inline">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).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H48B1FB1DD57E465696250042DF3D11E0"><enum>(d)</enum><header>Effective date</header><text>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.</text> </subsection></section></part>
<part id="HBF692EF1F296488196CCE972A51C18BA"><enum>3</enum><header>Reforms related to the low-income housing credit and tax-exempt housing bonds</header>
<section display-inline="no-display-inline" id="H0642F88B18254C8386EB9E00821B4514" section-type="subsequent-section"><enum>121.</enum><header>Hold harmless for reductions in area median gross income</header>
<subsection id="H20D7C1CAD3A14164AFC06E9B4CC95D6D"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/142">section 142(d)</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H0270287A569D47D4841FE51EEB6467AD" style="OLC">
<subparagraph id="H75DCCF270AE24B938ED6A87F051E69A9"><enum>(C)</enum><header>Hold harmless for reductions in area median gross income</header>
<clause id="H780A3C3EE9864B0A9CBC9339C51E6BF3"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H72B36D7CCA9148879B10CCE4A7D94FAC"><enum>(ii)</enum><header>Special rule for certain census changes</header><text>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—</text>
<subclause id="H954296EE5A9042E1A92D099EA922DE57"><enum>(I)</enum><text>the area median gross income determined under the HUD hold harmless policy with respect to such project for calendar year 2008, plus</text> </subclause>
<subclause id="H178EEE40DE284A8800A92119F22428BA"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="HBCEFC402C82E4A3F8718F4EAC7640081"><enum>(iii)</enum><header>HUD hold harmless policy</header><text>The term <term>HUD hold harmless policy</term> 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.</text> </clause>
<clause id="H7F32CE49EC2F44D78C9FF7B14FA170A3"><enum>(iv)</enum><header>HUD hold harmless impacted project</header><text>The term <term>HUD hold harmless impacted project</term> 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.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H2372947C905343D5B8A7C7C04C843DB2"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to determinations of area median gross income for calendar years after 2008.</text> </subsection></section>
<section id="HCE5C87BE9EF544409292E52FD57FAD41"><enum>122.</enum><header>Exception to annual current income determination requirement where determination not relevant</header>
<subsection id="H962936A1E2A4436CBAAE22BC7F65D11"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/142">section 142(d)(3)</external-xref> is amended by adding at the end the following new sentence: <quote>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.</quote></text> </subsection>
<subsection id="HDBFA555C761548058B3F47C8576527EF"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to years ending after the date of the enactment of this Act.</text> </subsection></section></part></subtitle>
<subtitle id="HD70B081FC5514265AB4366D49DE7BD23"><enum>B</enum><header>Single family housing</header>
<section display-inline="no-display-inline" id="H4BA0FB64B5994319808000C2F7C3028" section-type="subsequent-section"><enum>131.</enum><header>First-time homebuyer credit</header>
<subsection id="H2359CFE16C6D4E8E95F7EF18940461D7"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subpart C of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H13C99FFC19544D558BC5A7BAAD32933B" style="OLC">
<section id="H10A7D36368844ED086FCA480DAB89090"><enum>36.</enum><header>First-time homebuyer credit</header>
<subsection id="HB811FD4A964C4E1FA9E88EB5B2DA51D"><enum>(a)</enum><header>Allowance of credit</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HE4182A5FC27C45FAA80976F29D161E84"><enum>(b)</enum><header>Limitations</header>
<paragraph id="H97FD479EE99746DBB60471BB9EF86523"><enum>(1)</enum><header>Dollar limitation</header>
<subparagraph id="H8AF161F07890403CB680D8376688A41D"><enum>(A)</enum><header>In general</header><text>Except as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $7,500.</text> </subparagraph>
<subparagraph id="H8DAB64C4BF754284B74BAFDF59D5F9BF"><enum>(B)</enum><header>Married individuals filing separately</header><text display-inline="yes-display-inline">In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting <quote>$3,750</quote> for <quote>$7,500</quote>.</text> </subparagraph>
<subparagraph id="HAA479415BE8241C3955B32A937B0958D"><enum>(C)</enum><header>Other individuals</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HC2F6B1EE518849DFBD4C93B6F6054D11"><enum>(2)</enum><header>Limitation based on modified adjusted gross income</header>
<subparagraph id="HD7F96692434D430D832848013FE7E740"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<clause id="H99090A0AA2254CC298158F43D83500F1"><enum>(i)</enum><text>the excess (if any) of—</text>
<subclause id="HA24774ABFE9C421C93E0D91593B02EE8"><enum>(I)</enum><text display-inline="yes-display-inline">the taxpayer’s modified adjusted gross income for such taxable year, over</text> </subclause>
<subclause id="H493DF87B91E94F8D969EF84B06E68854"><enum>(II)</enum><text display-inline="yes-display-inline">$70,000 ($110,000 in the case of a joint return), bears to</text> </subclause></clause>
<clause id="HB171F16134044541A940BE484EC5018E"><enum>(ii)</enum><text display-inline="yes-display-inline">$20,000.</text> </clause></subparagraph>
<subparagraph id="H653AA3A78D3F4E6491C2C7A283EBACAB"><enum>(B)</enum><header>Modified adjusted gross income</header><text display-inline="yes-display-inline">For purposes of subparagraph (A), the term <term>modified adjusted gross income</term> 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.</text> </subparagraph></paragraph></subsection>
<subsection id="H98F5A98ED39146CC808FB1F1B5C249F2"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section—</text>
<paragraph id="H96C15088573A45D9981719AE74985100"><enum>(1)</enum><header>First-time homebuyer</header><text display-inline="yes-display-inline">The term <term>first-time homebuyer</term> 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.</text> </paragraph>
<paragraph id="H8522A1CD404E4855A704363EF5BCE62F"><enum>(2)</enum><header>Principal residence</header><text display-inline="yes-display-inline">The term <term>principal residence</term> has the same meaning as when used in section 121.</text> </paragraph>
<paragraph id="HD68C3DE43E8D4577AEE47005E6D4444"><enum>(3)</enum><header>Purchase</header>
<subparagraph id="H2618C3133BCE468A96782F866F305DB2"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>purchase</term> means any acquisition, but only if—</text>
<clause id="HBE01FE9718054AC88866A32E00458807"><enum>(i)</enum><text>the property is not acquired from a person related to the person acquiring it, and</text> </clause>
<clause id="H01AEB5897F2B4538B42F18DD4500BF73"><enum>(ii)</enum><text>the basis of the property in the hands of the person acquiring it is not determined—</text>
<subclause id="H0793AF37F22644B49FC7ED49C9248C29"><enum>(I)</enum><text>in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or</text> </subclause>
<subclause id="HE358ED06915D46BBB58C29DF06BC8488"><enum>(II)</enum><text>under section 1014(a) (relating to property acquired from a decedent).</text> </subclause></clause></subparagraph>
<subparagraph id="H9687A8BC9A554A1AA2271FC0A468F720"><enum>(B)</enum><header>Construction</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HADE1AAC98D4345B38BB6D8441E8F3C84"><enum>(4)</enum><header>Purchase price</header><text display-inline="yes-display-inline">The term <term>purchase price</term> means the adjusted basis of the principal residence on the date such residence is purchased.</text> </paragraph>
<paragraph id="H80E293502E5A4548BEE5AC1469B26DCC"><enum>(5)</enum><header>Related persons</header><text display-inline="yes-display-inline">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).</text> </paragraph></subsection>
<subsection id="HA4C735208EF94BD7B2E746E266ADFE00"><enum>(d)</enum><header>Exceptions</header><text display-inline="yes-display-inline">No credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if—</text>
<paragraph id="HB3F7F09F53AA424D86FFFC4D282606B"><enum>(1)</enum><text>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,</text> </paragraph>
<paragraph id="HFF29A411BAC44E6D81D4FDE7B400B199"><enum>(2)</enum><text>the residence is financed by the proceeds of a qualified mortgage issue the interest on which is exempt from tax under section 103,</text> </paragraph>
<paragraph id="H32758902EB744E1E91952D3F79AC073C"><enum>(3)</enum><text>the taxpayer is a nonresident alien, or</text> </paragraph>
<paragraph id="H0F1375A71E7E480EA8A89F52B2A1CFE5"><enum>(4)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H20DDC73CF2FB47FA8D201EBD005F2D02"><enum>(e)</enum><header>Reporting</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HABB26AD05DC84CA193481F93A7310088"><enum>(f)</enum><header>Recapture of credit</header>
<paragraph id="H7385F8B0877D48CD8FC10100AA04BDEC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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<fraction>2/3</fraction> percent of the amount of such credit for each taxable year in the recapture period.</text> </paragraph>
<paragraph id="H9EE8825822784D04972680D768B7E340"><enum>(2)</enum><header>Acceleration of recapture</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HD937646745AC40288BB11B94C94C1C61"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H3E8A657AC12A4C6CA2BB039EC7E9D526"><enum>(B)</enum><text>paragraph (1) shall not apply with respect to such credit for such taxable year or any subsequent taxable year .</text> </subparagraph></paragraph>
<paragraph id="H1005D0C3E0F14A99A645F85F00497669"><enum>(3)</enum><header>Limitation based on gain</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H0379CDB63F444B47A5F64BA6EFC8E2E8"><enum>(4)</enum><header>Exceptions</header>
<subparagraph id="HB2F8FB6EBCCC4487A976B8CE64553000"><enum>(A)</enum><header>Death of taxpayer</header><text>Paragraphs (1) and (2) shall not apply to any taxable year ending after the date of the taxpayer’s death.</text> </subparagraph>
<subparagraph id="HDE8F808049F5486EBB4CBF21253057AC"><enum>(B)</enum><header>Involuntary conversion</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H7DFEFB4FD01942208C3E7B268BBC6261"><enum>(C)</enum><header>Transfers between spouses or incident to divorce</header><text>In the case of a transfer of a residence to which section 1041(a) applies—</text>
<clause id="H9BCD60BC118A4F708DBFBF23411F11D8"><enum>(i)</enum><text>paragraph (2) shall not apply to such transfer, and</text> </clause>
<clause id="HFF13DC41B39F423CAF4F02B4BC54C2D"><enum>(ii)</enum><text>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).</text> </clause></subparagraph></paragraph>
<paragraph id="HDC8F7B4E819D4110924DCB7ED99B2800"><enum>(5)</enum><header>Joint returns</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HD0519832090C490E93CF5661001E8501"><enum>(6)</enum><header>Recapture period</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>recapture period</term> 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.</text> </paragraph></subsection>
<subsection id="H71634B424E80426F906D7535C67795A0"><enum>(g)</enum><header>Application of section</header><text display-inline="yes-display-inline">This section shall only apply to a principal residence purchased by the taxpayer after __, and before April 1, 2009.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC58CBB5C2E0849E4B919C34953DD9064"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HA77920DD8E0349EBB289E6475E0377AB"><enum>(1)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/26">Section 26(b)(2)</external-xref> is amended by striking <quote>and</quote> at the end of subparagraph (U), by striking the period and inserting <quote>, and</quote> and the end of subparagraph (V), and by inserting after subparagraph (V) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H119587A2CDB5450686308362292B0072" style="OLC">
<subparagraph id="HC8E798AF05114B0A97E5DCDFD83EF03"><enum>(W)</enum><text display-inline="yes-display-inline">section 36(f) (relating to recapture of homebuyer credit).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HE24CDB7B00C74EFAB1019CD17F023E29"><enum>(2)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/6211">Section 6211(b)(4)(A)</external-xref> is amended by striking <quote> and 35,</quote> and inserting <quote>35, 36,</quote>.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HDE4E0807D3C5458B9513E9DFA918DB5C"><enum>(3)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/31/1324">Section 1324(b)(2)</external-xref> of title 31, United States Code, is amended by inserting <quote>, 36,</quote> after <quote>section 35</quote>.</text> </paragraph>
<paragraph id="HAC18B16A836B481DBD79E1FFDD2D11B3"><enum>(4)</enum><text display-inline="yes-display-inline">The table of sections for subpart C of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> 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:</text>
<quoted-block display-inline="no-display-inline" id="H48228C43ACAD44788C239DF0EA9213B9" style="OLC">
<toc container-level="quoted-block-container" idref="H13C99FFC19544D558BC5A7BAAD32933B" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H10A7D36368844ED086FCA480DAB89090" level="section">Sec. 36. First-time homebuyer credit.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H04B5EC5400124D19BD17D638CBEDE8B1"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to __.</text> </subsection></section>
<section display-inline="no-display-inline" id="HE182222123284649ADF1CD0025A15619" section-type="subsequent-section"><enum>132.</enum><header>Additional standard deduction for real property taxes for nonitemizers</header>
<subsection id="H5DD4808A47B44309AE1508D9DBDBC8"><enum>(a)</enum><header>In general</header><text>Section 63(c)(1) (defining standard deduction) is amended by striking <quote>and</quote> at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting <quote>, and</quote>, and by adding at the end the following new subparagraph:</text>
<quoted-block id="H0CBC15734E754F8BB131CF86D2D4A8DE">
<subparagraph id="H5699E08FAA8F4AA29DE81D8BBC18F870"><enum>(C)</enum><text>in the case of any taxable year beginning in 2008, the real property tax deduction.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC505A96CC31E42C4A76CA03C3CE483A4"><enum>(b)</enum><header>Definition</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/63">Section 63(c)</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block id="HD262CD6013474A91BB80928BF99E4600">
<paragraph id="HBBDA058050604DBCA167844CB0BE405B"><enum>(8)</enum><header>Real property tax deduction</header><text>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).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H8DFAD6F72C9F41C0857EE478E7A796F"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2007.</text> </subsection></section></subtitle>
<subtitle id="HA0302016586E489E89C8D31C39F549D2"><enum>C</enum><header>General provisions</header>
<section display-inline="no-display-inline" id="HAC622244818C483089098EA864E40463" section-type="subsequent-section"><enum>141.</enum><header>Temporary liberalization of tax-exempt housing bond rules</header>
<subsection id="H82BF5A185E0E4A5C96DB778313F1649"><enum>(a)</enum><header>Temporary increase in volume cap</header>
<paragraph id="HA11FE8B798C942E699D3843365E04371"><enum>(1)</enum><header>In general</header><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/146">section 146</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H970CDF11733548A6B1743EBF6B004DB2" style="OLC">
<paragraph id="H6033C7252D044567AE71EDADD8C1C2A6"><enum>(5)</enum><header>Increase and set aside for housing bonds for 2008</header>
<subparagraph id="HFD8E782B9D9B4F6DBF20630582FC615B"><enum>(A)</enum><header>Increase for 2008</header><text>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—</text>
<clause id="H091801205B4242E39CFDBE3143FE42A0"><enum>(i)</enum><text>the numerator of which is the population of such State, and</text> </clause>
<clause id="H9D6A084655C4462B9650879DA1BC2DEA"><enum>(ii)</enum><text>the denominator of which is the total population of all States.</text> </clause></subparagraph>
<subparagraph id="H1091B4A0603F4BB30067EE99028377E4"><enum>(B)</enum><header>Set aside</header>
<clause id="H55041E78542444AABFCD50F8AA3BC5D0"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H2C5A59FBE184453DB64D3FEB24FED437"><enum>(ii)</enum><header>Qualified housing issue</header><text>For purposes of this paragraph, the term <term>qualified housing issue</term> means—</text>
<subclause id="HE0FCF4221B844BB18260007FD1ED2604"><enum>(I)</enum><text>an issue described in section 142(a)(7) (relating to qualified residential rental projects), or</text> </subclause>
<subclause id="H61DD829707164DF4BE93E24508F80309"><enum>(II)</enum><text>a qualified mortgage issue (determined by substituting <quote>12-month period</quote> for <quote>42-month period</quote> each place it appears in section 143(a)(2)(D)(i)).</text> </subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H1EAC07153FFA457BBA75867966F4268C"><enum>(2)</enum><header>Carryforward of unused limitations</header><text>Subsection (f) of <external-xref legal-doc="usc" parsable-cite="usc/26/146">section 146</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H5F4047D9B3A045DBA45202B2EE21F84D" style="OLC">
<paragraph id="H7A6C8CF6A3DF40B9B75294AA9F80B692"><enum>(6)</enum><header>Special rules for increased volume cap under subsection <enum-in-header>(d)(5)</enum-in-header></header><text>No amount which is attributable to the increase under subsection (d)(5) may be used—</text>
<subparagraph id="H0EA6E2021C66412EB019CE331100339B"><enum>(A)</enum><text>for any issue other than a qualified housing issue (as defined in subsection (d)(5)), or</text> </subparagraph>
<subparagraph id="H7501C61B566C4C86A98BB50142BB4911"><enum>(B)</enum><text>to issue any bond after calendar year 2010.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H96C1CDC2C46E4F89B287068F005ECF44"><enum>(b)</enum><header>Temporary rule for use of qualified mortgage bonds proceeds for subprime refinancing loans</header>
<paragraph id="H7B4A6452643C4CA69F00E89D34B263A2"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Section 143(k) (relating to other definitions and special rules) is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HDE096ADE4C8A45499847D25EAEE113EC" style="OLC">
<paragraph id="HAD872525FFC948C0815421E7991935F3"><enum>(12)</enum><header>Special rules for subprime refinancings</header>
<subparagraph id="HF3EB344D28764A5287B2C7BE3C506FDE"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H637B3A10F1634216A5C0081E00824001"><enum>(B)</enum><header>Special rules</header><text>In applying subparagraph (A) to any refinancing—</text>
<clause id="HB00A14174525433DABA6D164FF358B2"><enum>(i)</enum><text>subsection (a)(2)(D)(i) shall be applied by substituting <quote>12-month period</quote> for <quote>42-month period</quote> each place it appears,</text> </clause>
<clause id="HD9D69DF73CBB42D5B2EDDE0058A08F51"><enum>(ii)</enum><text>subsection (d) (relating to 3-year requirement) shall not apply, and</text> </clause>
<clause id="H08C8769A5A6D49F48C59E259CE3BD1E6"><enum>(iii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H972D7CB1108C4CFA960001BFF999ADE0"><enum>(C)</enum><header>Qualified subprime loan</header><text>The term <term>qualified subprime loan</term> 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.</text> </subparagraph>
<subparagraph id="H997EFF954C614AED88EE6463B5135D32"><enum>(D)</enum><header>Termination</header><text>This paragraph shall not apply to any bonds issued after December 31, 2010.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H4DD8E869B31740DFB38DCBB39591CCFF"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.</text> </subsection></section>
<section id="H54984554420C4707A3C919172D40BA06"><enum>142.</enum><header>Repeal of alternative minimum tax limitations on tax-exempt housing bonds, low-income housing tax credit, and rehabilitation credit</header>
<subsection id="HC691183FC68A4069A061471300F60049"><enum>(a)</enum><header>Tax-exempt interest on certain housing bonds exempted from alternative minimum tax</header>
<paragraph id="H43EE78DD734246D1A4E3608CCAB71B8D"><enum>(1)</enum><header>In general</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H50AC7E0552D746C2B0479E9EE2199929" style="OLC">
<clause id="H8EF5FFCDCEB84EA4BAC5E256B75120D"><enum>(iii)</enum><header>Exception for certain housing bonds</header><text>For purposes of clause (i), the term <term>private activity bond</term> shall not include any bond issued after the date of the enactment of this clause if such bond is—</text>
<subclause id="H9983B0565FDE410CBFA7C91434AC49C4"><enum>(I)</enum><text>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)),</text> </subclause>
<subclause id="HF48011D3A43A428A9601C7FF90399172"><enum>(II)</enum><text display-inline="yes-display-inline">a qualified mortgage bond (as defined in section 143(a)), or</text> </subclause>
<subclause id="H1971199EB55F4252AB4CAE6E6CB700E9"><enum>(III)</enum><text display-inline="yes-display-inline">a qualified veterans’ mortgage bond (as defined in section 143(b)).</text> </subclause><continuation-text continuation-text-level="clause">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).</continuation-text></clause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HB6BA62E4312B42E9A55C61E6278FD768"><enum>(2)</enum><header>No adjustment to adjusted current earnings</header><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/56">section 56(g)(4)</external-xref> is amended by adding at the end the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H7C3C3776C1F7487E90885B83DF81913D" style="OLC">
<clause id="HECB9DC218D7C45E8AF99DEBE4BE60015"><enum>(iii)</enum><header>Tax exempt interest on certain housing bonds</header><text display-inline="yes-display-inline">Clause (i) shall not apply in the case of any interest on a bond to which section 57(a)(5)(C)(iii) applies.</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H422C0B8C46FB4196BF58C075764E9862"><enum>(b)</enum><header>Allowance of low-income housing credit against alternative minimum tax</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H8789537D1C934A2BB5E1385160047BF" style="OLC">
<clause id="H55B02A5D318040A7BB9FF714693B9D11"><enum>(ii)</enum><text>the credit determined under section 42 to the extent attributable to buildings placed in service after December 31, 2007,</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HFD29D2610A6E4CFFAA64D8A43C627210"><enum>(c)</enum><header>Allowance of rehabilitation credit against alternative minimum tax</header><text>Subparagraph (B) of section 38(c)(4), as amended by subsection (b), is amended by striking <quote>and</quote> at the end of clause (iv), by redesignating clause (v) as clause (vi), and by inserting after clause (iv) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="HFF70D8EF01DF4E079BB41097C9A8B682" style="OLC">
<clause id="H2DCF61BA53B94CB9A2FF34883E11EF3E"><enum>(v)</enum><text display-inline="yes-display-inline">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</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HD782DA21D0474553A1F2641BEF01CFCA"><enum>(d)</enum><header>Effective date</header>
<paragraph id="H0479B75A3F34460596F200C09256B76F"><enum>(1)</enum><header>Housing bonds</header><text display-inline="yes-display-inline">The amendments made by subsection (a) shall apply to bonds issued after the date of the enactment of this Act.</text> </paragraph>
<paragraph commented="no" id="H26D07F461C5F405280375FEFF952109"><enum>(2)</enum><header>Low income housing credit</header><text display-inline="yes-display-inline">The amendments made by subsection (b) shall apply to credits determined under <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42</external-xref> of the Internal Revenue Code of 1986 to the extent attributable to buildings placed in service after December 31, 2007.</text> </paragraph>
<paragraph id="HC6EA3FB800524286BCC6F778128CD200"><enum>(3)</enum><header>Rehabilitation credit</header><text display-inline="yes-display-inline">The amendments made by subsection (c) shall apply to credits determined under <external-xref legal-doc="usc" parsable-cite="usc/26/47">section 47</external-xref> 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.</text> </paragraph></subsection></section>
<section commented="no" display-inline="no-display-inline" id="H9E1A15F7D8A2490FB97374501199BAE9" section-type="subsequent-section"><enum>143.</enum><header>Bonds guaranteed by Federal home loan banks eligible for treatment as tax-exempt bonds</header>
<subsection commented="no" id="H48BC06D7EB68411AA2A30B962B81D47"><enum>(a)</enum><header>In general</header><text>Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/149">section 149(b)(3)</external-xref> of the Internal Revenue Code of 1986 (relating to exceptions for certain insurance programs) is amended by striking <quote>or</quote> at the end of clause (ii), by striking the period at the end of clause (iii) and inserting <quote>, or</quote> and by adding at the end the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="HAA912F21161446B39DDD5184C9AC2C00" style="OLC">
<clause commented="no" id="H921083381E8F4AFC8500F5237EEE28C"><enum>(iv)</enum><text display-inline="yes-display-inline">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).</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="H25BC6CC2FC7144339CACFC967B9CCACE"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to guarantees made after the date of the enactment of this Act.</text> </subsection></section>
<section display-inline="no-display-inline" id="H97BCC9FF74B34201924356001EFF03F0" section-type="subsequent-section"><enum>144.</enum><header>Modification of rules pertaining to FIRPTA nonforeign affidavits</header>
<subsection id="H7736C2DDF65C40E4A6F9C6EA7452E1BE"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of section 1445 (relating to exemptions) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H1076B0BE1122493BAB1C8CD8BD19A1F5" style="OLC">
<paragraph id="H4B0019AEBC454DBC98A4C7517C972800"><enum>(9)</enum><header>Alternative procedure for furnishing nonforeign affidavit</header><text>For purposes of paragraphs (2) and (7)—</text>
<subparagraph id="H9CE509CEA5824A4DB6CFF697B89F4F89"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (2) shall be treated as applying to a transaction if, in connection with a disposition of a United States real property interest—</text>
<clause id="H356D66E8040B4799A1EAA0613B7E4790"><enum>(i)</enum><text display-inline="yes-display-inline">the affidavit specified in paragraph (2) is furnished to a qualified substitute, and</text> </clause>
<clause id="H80974DE8A3F4400993387CB3A2DB4960"><enum>(ii)</enum><text display-inline="yes-display-inline">the qualified substitute furnishes a statement to the transferee stating, under penalty of perjury, that the qualified substitute has such affidavit in his possession.</text> </clause></subparagraph>
<subparagraph id="HD83F260F20A04CD4AA87199FA706C612"><enum>(B)</enum><header>Regulations</header><text>The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H1D06011AA596493F92D72D19186100FA"><enum>(b)</enum><header>Qualified substitute</header><text>Subsection (f) of section 1445 (relating to definitions) is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H5D8A2463DF104612971E1046891D28C1" style="OLC">
<paragraph id="H7CFCD14AAA83462BB7BAF78225905906"><enum>(6)</enum><header>Qualified substitute</header><text>The term <term>qualified substitute</term> means, with respect to a disposition of a United States real property interest—</text>
<subparagraph id="H42C6381D16CC4A92AD45CD6DF562D4A6"><enum>(A)</enum><text display-inline="yes-display-inline">the person (including any attorney or title company) responsible for closing the transaction, other than the transferor’s agent, and</text> </subparagraph>
<subparagraph id="HA96A503C22374A2EB74D91B3590069DF"><enum>(B)</enum><text display-inline="yes-display-inline">the transferee’s agent.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H9D37F10EF33E419C9C823315BC1461F4"><enum>(c)</enum><header>Exemption not To apply if knowledge or notice that affidavit or statement is false</header>
<paragraph id="HBA64779788294F0A90D7CBF7CBD42592"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (7) of section 1445(b) (relating to special rules for paragraphs (2) and (3)) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H81E777F026DE4FBBB283691CF5DDA6B" style="OLC">
<paragraph id="H6F58C883AF74410385CF81A1E23EA3F"><enum>(7)</enum><header>Special rules for paragraphs (2), (3), and (9)</header><text display-inline="yes-display-inline">Paragraph (2), (3), or (9) (as the case may be) shall not apply to any disposition—</text>
<subparagraph id="H7568BFCC107D49F2B4894CA956112F33"><enum>(A)</enum><text>if—</text>
<clause id="HFB1AEADCACEE43819B58AE73809F9380"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H03767F3C2F7C4D3C8036F408E46FF93F"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause></subparagraph>
<subparagraph id="H90C7EF4FC7C74F469337B4CF873660A7"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H77A822B9F6A648B19BD13D2B0018DB00"><enum>(2)</enum><header>Liability</header>
<subparagraph id="H876EF063D3BD48CEBBD08DE3961EFDED"><enum>(A)</enum><header>Notice</header><text display-inline="yes-display-inline">Paragraph (1) of section 1445(d) (relating to notice of false affidavit; foreign corporations) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H55E08274448B4C4100F6FBBACED5D600" style="OLC">
<paragraph id="H4E7BECAD81AF4CEDAFBB03CFAF09C1E5"><enum>(1)</enum><header>Notice of false affidavit; foreign corporations</header><text display-inline="yes-display-inline">If—</text>
<subparagraph id="HCE52B372CE8648A29E12F3F98D8A2B3"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H63B7FE5D5E23476686EF72692BB992CB"><enum>(B)</enum><text>in the case of—</text>
<clause id="H1DA912BF94A646B2BF2DFF8E642B874D"><enum>(i)</enum><text>any transferor’s agent—</text>
<subclause id="H01F9D51CC4094728A000C3E0A02DA74"><enum>(I)</enum><text>such agent has actual knowledge that such affidavit is false, or</text> </subclause>
<subclause id="H47A280BA9E184EB8A967BB1350B5C1A7"><enum>(II)</enum><text>in the case of an affidavit described in subsection (b)(2) furnished by a corporation, such corporation is a foreign corporation, or</text> </subclause></clause>
<clause id="H4C08CD1F56854038001069A3FDA26798"><enum>(ii)</enum><text display-inline="yes-display-inline">any transferee’s agent or qualified substitute, such agent or substitute has actual knowledge that such affidavit is false,</text> </clause><continuation-text continuation-text-level="subparagraph">such agent or qualified substitute shall so notify the transferee at such time and in such manner as the Secretary shall require by regulations.</continuation-text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H70CBE28B42B04C7F979DAFF28C428168"><enum>(B)</enum><header>Failure to furnish notice</header><text display-inline="yes-display-inline">Paragraph (2) of section 1445(d) (relating to failure to furnish notice) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HA649FC6D484D4DCBAE07FE60522EC32" style="traditional">
<paragraph id="H9FA82F99D78A4C0EA845385E30E34E11"><enum>(2)</enum><header>Failure to furnish notice</header>
<subparagraph id="H1879C0F5A4184C27BE6232BCFAB3833"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </subparagraph>
<subparagraph id="HE4636F4061D244ECB2FC1BC700A9F9FA"><enum>(B)</enum><header>Liability limited to amount of compensation</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H3270F05126514E8D98BEA2BFE4257174"><enum>(C)</enum><header>Conforming amendment</header><text>The heading for <external-xref legal-doc="usc" parsable-cite="usc/26/1445">section 1445(d)</external-xref> is amended by striking <quote><header-in-text level="subsection" style="OLC">or transferee’s agents</header-in-text></quote> and inserting <quote><header-in-text level="subsection" style="OLC">, transferee’s agents, or qualified substitutes</header-in-text></quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H61AD9F17C5CF431AB03F51A76BC12D52"><enum>(d)</enum><header>Effective date</header><text>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.</text> </subsection></section>
<section id="H287F4B2449FF488F9C55D9E58550C78"><enum>145.</enum><header>Modification of definition of tax-exempt use property for purposes of the rehabilitation credit</header>
<subsection id="H057F06EF0B334F28B57CFE1E444343D6"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Clause (I) of <external-xref legal-doc="usc" parsable-cite="usc/26/47">section 47(c)(2)(B)(v)</external-xref> is amended by striking <quote>section 168(h)</quote> and inserting <quote>section 168(h), except that <quote>50 percent</quote> shall be substituted for <quote>35 percent</quote> in paragraph (1)(B)(iii) thereof</quote>.</text> </subsection>
<subsection id="H36BC9689B318410790A1D3F5659DA3C"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to expenditures properly taken into account for periods after December 31, 2007.</text> </subsection></section></subtitle>
<enum>II</enum><header>Reforms related to real estate investment trusts</header>
<subtitle id="HAD4C90A007A74840BBC17768B45DC000"><enum>A</enum><header>Foreign currency and other qualified activities</header>
<section id="HB7F08C48DFD44A4799EF0047E04F5366"><enum>201.</enum><header>Revisions to REIT income tests</header>
<subsection id="HFD5DE3C664C74C89AC9926F6F2431647"><enum>(a)</enum><header>Addition of permissible income categories</header><text display-inline="yes-display-inline">Section 856(c) (relating to limitations) is amended—</text>
<paragraph id="H0BA9A8D5FC164E0CBAF836B37E2FCB80"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> at the end of paragraph (2)(G) and by inserting after paragraph (2)(H) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="H3A271C81C5914BD4A5724B60B8BC353" style="OLC">
<subparagraph id="HB10EC52F9A8E4E67A113A3B5BC310090"><enum>(I)</enum><text display-inline="yes-display-inline">passive foreign exchange gains; and</text> </subparagraph>
<subparagraph id="H9BBD68082E8D4B7C8152E39D15923DA5"><enum>(J)</enum><text display-inline="yes-display-inline">any other item of income or gain as determined by the Secretary;</text> </subparagraph><after-quoted-block>, and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H00A88556BC1C46D9815826DFE006219"><enum>(2)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> at the end of paragraphs (3)(H) and (3)(I) and by inserting after paragraph (3)(I) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="H35D8EB4D40194D65A5C9CDEBB8300FA" style="OLC">
<subparagraph id="H06B15A32701E4A29BC08CD6415CCD700"><enum>(J)</enum><text display-inline="yes-display-inline">real estate foreign exchange gains; and</text> </subparagraph>
<subparagraph id="H1AB4C7B40E574F25A4866B54BBA4F6E2"><enum>(K)</enum><text display-inline="yes-display-inline">any other item of income or gain as determined by the Secretary; and</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HD6E221FC329D44C6B3186B16BA921C9E"><enum>(b)</enum><header>Rules regarding foreign currency transactions</header><text display-inline="yes-display-inline">Section 856 (defining real estate investment trust) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HAAD84BD24A3B4E15B08600559500B369" style="OLC">
<subsection id="H081982A45DD740C79F0530A63131C0D0"><enum>(n)</enum><header>Rules regarding foreign currency transactions</header><text display-inline="yes-display-inline">With respect to any taxable year—</text>
<paragraph id="H7A1B62BFB8864CADB01FF49955629500"><enum>(1)</enum><header>Real estate foreign exchange gains</header><text display-inline="yes-display-inline">For purposes of subsection (c)(3)(J), the term <term>real estate foreign exchange gains</term> means—</text>
<subparagraph id="HFFE4D3C9C3574C1900D7F048F63F3F54"><enum>(A)</enum><text display-inline="yes-display-inline">foreign currency gains (as defined in section 988(b)(1)) which are attributable to—</text>
<clause id="H66747B75AFBE46AFBC770424C37EB42B"><enum>(i)</enum><text display-inline="yes-display-inline">any item described in subsection (c)(3) (other than in subparagraph (J) thereof),</text> </clause>
<clause id="H4F545881C16742F0B34E8EFDC5B34FD9"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="HAF2ED2D963C0466EB200A028D227ABAF"><enum>(iii)</enum><text display-inline="yes-display-inline">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)),</text> </clause></subparagraph>
<subparagraph id="HBDABE127C7A745359FB200EE57DC2DA"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="HC5D6424EEE264887B7D5008D09B3B08C"><enum>(i)</enum><text display-inline="yes-display-inline">subsection (c)(3) (without regard to subparagraph (J) thereof) for the taxable year, and</text> </clause>
<clause id="HF3DFF84B59D5481BA2AAF8B5C3F5FA94"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause></subparagraph>
<subparagraph id="H5A5CF8BAAB0E460F903C5F1ED4B69FFD"><enum>(C)</enum><text display-inline="yes-display-inline">any other foreign currency gains as determined by the Secretary.</text> </subparagraph></paragraph>
<paragraph id="HD387A2526B654669BB1335AFA27578FA"><enum>(2)</enum><header>Passive foreign exchange gains</header><text display-inline="yes-display-inline">For purposes of subsection (c)(2)(I), the term <term>passive foreign exchange gains</term> means—</text>
<subparagraph id="HCDC9EACC728342BFAC38E3DB4B09F611"><enum>(A)</enum><text display-inline="yes-display-inline">real estate foreign exchange gains,</text> </subparagraph>
<subparagraph id="H1B3CD283EF504C7B84754EF92EFB100"><enum>(B)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H1201814FA04146D8A800BC70182C1962"><enum>(C)</enum><text display-inline="yes-display-inline">any other foreign currency gains as determined by the Secretary.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H8F66550AE61B495EA63FCE681C2330C9"><enum>(c)</enum><header>Addition to REIT hedging rule</header><text display-inline="yes-display-inline">Subparagraph (G) of <external-xref legal-doc="usc" parsable-cite="usc/26/856">section 856(c)(5)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H855CA367AE68405C99C7AE8EE307BB26" style="OLC">
<subparagraph id="H5322617356FB4F7C8E00E5A006BD858D"><enum>(G)</enum><header>Treatment of certain hedging instruments</header><text display-inline="yes-display-inline">Except to the extent as determined by the Secretary—</text>
<clause id="H4BEA07D3FB694FD5B35E636303E1CA9B"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="HF21539C8D2D74807AA2453783EE4556F"><enum>(ii)</enum><text display-inline="yes-display-inline">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).</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H4FAB2AF96AEB49AF9E2F777502E8B8C2"><enum>(d)</enum><header>Authority To exclude items of income from REIT income tests</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/856">Section 856(c)(5)</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H7C5E16DE983D401ABFE51EA3F319798F" style="OLC">
<subparagraph id="HEA0ED4DA635D4990AEB7E078CA446424"><enum>(H)</enum><header>Secretarial authority to exclude other items of income</header><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H56066DB885374B339432ED42AD1691CE"><enum>202.</enum><header>Revisions to REIT asset tests</header>
<subsection id="H408084709547449F907BD98876B6FBDA"><enum>(a)</enum><header>Clarification of valuation test</header><text display-inline="yes-display-inline">The first sentence in the matter following <external-xref legal-doc="usc" parsable-cite="usc/26/856">section 856(c)(4)(B)(iii)(III)</external-xref> is amended by inserting <quote>(including a discrepancy caused solely by the change in the foreign currency exchange rate used to value a foreign asset)</quote> after <quote>such requirements</quote>.</text> </subsection>
<subsection id="H8D66030422234F1A93BA49F1FABA5741"><enum>(b)</enum><header>Clarification of permissible asset category</header><text display-inline="yes-display-inline">Section 856(c)(5), as amended by <external-xref legal-doc="usc" parsable-cite="usc/26/301">section 301(d),</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HA0F5DCE1185C405380D4017914F75600" style="OLC">
<subparagraph id="H07C52EC91EF0415CA5004F99FA5B9FB5"><enum>(I)</enum><header>Cash</header><text display-inline="yes-display-inline">The term <term>cash</term> 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)).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H7C3BF9A623EA45E29BDADD9D47677150"><enum>203.</enum><header>Conforming foreign currency revisions</header>
<subsection id="H9DA0B5F78F094FE6B24E590000C48775"><enum>(a)</enum><header>Net income from foreclosure property</header><text display-inline="yes-display-inline">Clause (i) of <external-xref legal-doc="usc" parsable-cite="usc/26/857">section 857(b)(4)(B)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HF74CB512002F4BFC870215CE71BE5740" style="OLC">
<clause id="HF069BF572584464080F7A008E4DBC1C"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE159DC0FCAA246DCB40001F5C8E63CBF"><enum>(b)</enum><header>Net income from prohibited transactions</header><text display-inline="yes-display-inline">Clause (i) of <external-xref legal-doc="usc" parsable-cite="usc/26/857">section 857(b)(6)(B)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HE97C205FE4374D95A264C8EB99672CD9" style="OLC">
<clause id="H3A37C90B10154AEFA7C3F0A6F6077949"><enum>(i)</enum><text display-inline="yes-display-inline">the term <term>net income derived from prohibited transactions</term> 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;</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section></subtitle>
<subtitle id="H2F781AE10E2B4B5292F8C797B1E2B7DF"><enum>B</enum><header>Taxable REIT subsidiaries</header>
<section id="H0BD595DA2A3D40EA88C423D9B6D19585"><enum>211.</enum><header>Conforming taxable REIT subsidiary asset test</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/856">Section 856(c)(4)(B)(ii)</external-xref> is amended by striking <quote>20 percent</quote> and inserting <quote>25 percent</quote>.</text> </section></subtitle>
<subtitle id="H2F927CA58CE441929290C3DA187B9722"><enum>C</enum><header>Dealer sales</header>
<section id="HC6E6CFC4CBE8493CB8E263AE276BC853"><enum>221.</enum><header>Holding period under safe harbor</header><text display-inline="no-display-inline">Section 857(b)(6) (relating to income from prohibited transactions) is amended—</text>
<paragraph id="H3AB369BB766345C6A46F1CE8FE46491C"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>4 years</quote> in subparagraphs (C)(i), (C)(iv), and (D)(i) and inserting <quote>2 years</quote>,</text> </paragraph>
<paragraph id="HAD7DFBE491E643C98937BD43D2F0C84B"><enum>(2)</enum><text display-inline="yes-display-inline">by striking <quote>4-year period</quote> in subparagraphs (C)(ii), (D)(ii), and (D)(iii) and inserting <quote>2-year period</quote>, and</text> </paragraph>
<paragraph id="H8F081B7161F9436683C422C19E5EA16C"><enum>(3)</enum><text display-inline="yes-display-inline">by striking <quote>real estate asset</quote>and all that follows through <quote>if</quote> in the matter preceding clause (i) of subparagraphs (C) and (D), respectively, and inserting <quote>real estate asset (as defined in section 856(c)(5)(B)) and which is described in section 1221(a)(1) if</quote>.</text> </paragraph></section>
<section id="H05D1C8A8C0204B4F8E4169A4E2D18E51"><enum>222.</enum><header>Determining value of sales under safe harbor</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/857">Section 857(b)(6)</external-xref> is amended—</text>
<paragraph id="H158AA865FC014393B693553DC2871376"><enum>(1)</enum><text display-inline="yes-display-inline">by striking the semicolon at the end of subparagraph (C)(iii) and inserting <quote>, 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;</quote>, and</text> </paragraph>
<paragraph id="HD24116C8BCEE4A1395C48E0146A00547"><enum>(2)</enum><text display-inline="yes-display-inline">by adding <quote>or</quote> at the end of subclause (II) of subparagraph (D)(iv) and by adding at the end of such subparagraph the following new subclause:</text>
<quoted-block display-inline="no-display-inline" id="HF43193DAC14143A9A5AA454CFA7FC1D" style="OLC">
<subclause id="HAF02CF11E00E4E1D84027762F522B1E" indent="up1"><enum>(III)</enum><text>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,</text> </subclause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section></subtitle>
<subtitle id="H86DC8A3250634FE98410E2A130953292"><enum>D</enum><header>Health care REITs</header>
<section id="H9F0BA0CCEF1F46F985B3D649D12623A7"><enum>231.</enum><header>Conformity for health care facilities</header>
<subsection id="H5B3CE167497D48D7AB682E902FB71CA6"><enum>(a)</enum><header>Related party rentals</header><text display-inline="yes-display-inline">Subparagraph (B) of section 856(d)(8) (relating to special rule for taxable REIT subsidiaries) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H9F438DCEF279475EB011A45D9CB70909" style="OLC">
<subparagraph id="H8BD0763E37354435AF2C66003EC0B6B2"><enum>(B)</enum><header>Exception for certain lodging facilities and health care property</header><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H47C1CCD6A4FD4D87003FB61CCBDC9E5D"><enum>(b)</enum><header>Eligible independent contractor</header><text display-inline="yes-display-inline">Subparagraphs (A) and (B) of section 856(d)(9) (relating to eligible independent contractor) are amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HB9D508298AFE41BCAD608DAF4970F97" style="OLC">
<subparagraph id="H31E309666EAC463F80BCACC226AA0030"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>eligible independent contractor</term> 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.</text> </subparagraph>
<subparagraph id="HA5A7782C46F14E8886198500A87F9D9B"><enum>(B)</enum><header>Special rules</header><text display-inline="yes-display-inline">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:</text>
<clause id="HE72FDAFE2DC144BFA3F05BB3FFFA17C2"><enum>(i)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H7972AE03BCA24B0A8891EA1F93C589C1"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H6543E6E712C44A0B8D781B0300FBB393"><enum>(iii)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="HDDD068114C9B4B2A91BA4EC71F7F637"><enum>(I)</enum><text display-inline="yes-display-inline">January 1, 1999, or</text> </subclause>
<subclause id="H06E0765ACA904CB400A90030D1300470"><enum>(II)</enum><text display-inline="yes-display-inline">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.</text> </subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H737094676A3C4743A09EC2358F08D38B"><enum>(c)</enum><header>Taxable reit subsidiaries</header><text>The last sentence of <external-xref legal-doc="usc" parsable-cite="usc/26/856">section 856(l)(3)</external-xref> is amended—</text>
<paragraph id="HEF4CE3844C9746A4A29CBB797800DD69"><enum>(1)</enum><text>by inserting <quote>or a health care facility</quote> after <quote>a lodging facility</quote>, and</text> </paragraph>
<paragraph id="HC5947C65440C4130B55DAA8BC8E3FAA"><enum>(2)</enum><text>by inserting <quote>or health care facility</quote> after <quote>such lodging facility</quote>.</text> </paragraph></subsection></section></subtitle>
<subtitle id="H67829839F786486FADAC23A224C123C4"><enum>E</enum><header>Effective dates</header>
<section id="HC304DEC0FD5A4F6DA126FBEE70E250AA"><enum>241.</enum><header>Effective dates</header>
<subsection id="H5DA13BC2B5E6431EA3CB00671479FDD9"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H947A8F87BB28461EA55953FEE3C2F4EA"><enum>(b)</enum><header>REIT income tests</header>
<paragraph id="H50ABC8AF34A040AC97BA744E98B07970"><enum>(1)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H56DD0A1E367C45CA92BE57FD82C7F512"><enum>(2)</enum><text>The amendment made by section 201(c) shall apply to transactions entered into after the date of the enactment of this Act.</text> </paragraph>
<paragraph id="H98FD8F6C1A854E02A1B588795BCE300"><enum>(3)</enum><text>The amendment made by section 201(d) shall apply after the date of the enactment of this Act.</text> </paragraph></subsection>
<subsection id="H29C99F7ED075401280C06B52F01487E8"><enum>(c)</enum><header>Conforming foreign currency revisions</header>
<paragraph id="H711E6F3A2C204C1BAB3464A6ECA173DC"><enum>(1)</enum><text>The amendment made by section 203(a) shall apply to gains recognized after the date of the enactment of this Act.</text> </paragraph>
<paragraph id="HF7BD083BD83C438492CE409875E4D4C8"><enum>(2)</enum><text>The amendment made by section 203(b) shall apply to gains and deductions recognized after the date of the enactment of this Act.</text> </paragraph></subsection>
<subsection id="H71D721EA462A40539C4420A172F7A35E"><enum>(d)</enum><header>Dealer sales</header><text>The amendments made by subtitle C shall apply to sales made after the date of the enactment of this Act.</text> </subsection></section></subtitle>
<enum>III</enum><header>Revenue provisions</header>
<section display-inline="no-display-inline" id="H6E81B8C336AE44368899F253E3801400" section-type="subsequent-section"><enum>301.</enum><header>Broker reporting of customer’s basis in securities transactions</header>
<subsection id="H4F3374B023664B2EA96137245707C4B"><enum>(a)</enum><header>In general</header>
<paragraph id="HA8D1E03B69FF41FF8177EE033C1F88F3"><enum>(1)</enum><header>Broker reporting for securities transactions</header><text>Section 6045 (relating to returns of brokers) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H60A54070D8EC431BAF2E02BD7872A2E6" style="OLC">
<subsection id="H114019EB2102466DB601FE99CB90ACE8"><enum>(g)</enum><header>Additional information required in the case of securities transactions</header>
<paragraph id="H0717C3609AA143C6965E8174D793EA38"><enum>(1)</enum><header>In general</header><text>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).</text> </paragraph>
<paragraph id="H9A2F33D0BB4B4FA5B7C018E043CE366"><enum>(2)</enum><header>Additional information required</header>
<subparagraph id="HBD04BCD2360240348E608DD6D4F86226"><enum>(A)</enum><header>In general</header><text>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).</text> </subparagraph>
<subparagraph id="HD753C4FFBCAF4F69B1008D30540220AF"><enum>(B)</enum><header>Determination of adjusted basis</header><text>For purposes of subparagraph (A)—</text>
<clause commented="no" id="HC1A60E4814CC4722B7A2003357F5D824"><enum>(i)</enum><header>In general</header><text>The customer’s adjusted basis shall be determined—</text>
<subclause commented="no" id="HC9E7816FABD84B16B0A4089D877B3B40"><enum>(I)</enum><text>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,</text> </subclause>
<subclause commented="no" display-inline="no-display-inline" id="H4E2B926465314402A6139CCBDDF0CF8C"><enum>(II)</enum><text display-inline="yes-display-inline">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</text> </subclause>
<subclause commented="no" id="HBD31F64D6EA4430AA11B192141AC5112"><enum>(III)</enum><text display-inline="yes-display-inline">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.</text> </subclause></clause>
<clause id="HB4A51BAC88EF4B118401EAB4FBFCF096"><enum>(ii)</enum><header>Exception for wash sales</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H350DC5DC12A3496F0009441C8803ADAE"><enum>(3)</enum><header>Covered security</header><text>For purposes of this subsection—</text>
<subparagraph id="H3B8C125834914C6592936DC93477A965"><enum>(A)</enum><header>In general</header><text>The term <term>covered security</term> means any specified security acquired on or after the applicable date if such security—</text>
<clause id="H89C632BFD63D4BC7B072B488C08197E2"><enum>(i)</enum><text>was acquired through a transaction in the account in which such security is held, or</text> </clause>
<clause id="H07AD1A5181494D5CB2D9B1E7382900EA"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H6520342BA94A4662A1988758BC5C44F4"><enum>(B)</enum><header>Specified security</header><text>The term <term>specified security</term> means—</text>
<clause id="H3937FD1EC57641CA92FDB4892F09B821"><enum>(i)</enum><text display-inline="yes-display-inline">any share of stock in a corporation,</text> </clause>
<clause id="HD288FB02E4AA47749CCBBA004004D73E"><enum>(ii)</enum><text>any note, bond, debenture, or other evidence of indebtedness,</text> </clause>
<clause id="H7AC12C42CE8B4917A3B15F445FCDB7FF"><enum>(iii)</enum><text>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</text> </clause>
<clause id="HA0E6841322C24BDDB4A1FD3BDF49C237"><enum>(iv)</enum><text>any other financial instrument with respect to which the Secretary determines that adjusted basis reporting is appropriate for purposes of this subsection.</text> </clause></subparagraph>
<subparagraph id="H83C854E9F5F5462887422B6E11B0CACC"><enum>(C)</enum><header>Applicable date</header><text>The term <term>applicable date</term> means—</text>
<clause id="H524AF522A36B48BBAE1CC903517CC558"><enum>(i)</enum><text>January 1, 2010, in the case of any specified security which is stock in a corporation, and</text> </clause>
<clause id="H1AD3C797B5D74A04BF11FB6C1336196B"><enum>(ii)</enum><text>January 1, 2012, or such later date determined by the Secretary in the case of any other specified security.</text> </clause></subparagraph></paragraph>
<paragraph id="HF90EC712DAD14252809B7465E7998ED0"><enum>(4)</enum><header>Treatment of S corporations</header><text>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.</text> </paragraph>
<paragraph id="H0C8AF51DBB004D4999D4950065F137B9"><enum>(5)</enum><header>Special rules for short sales</header>
<subparagraph id="H458B29DE1EDC4092878ECEC370913660"><enum>(A)</enum><header>In general</header><text>In the case of a short sale, reporting under this section shall be made for the year in which such sale is closed.</text> </subparagraph>
<subparagraph id="HC3EDA01FB835450EA863264EE213AE5"><enum>(B)</enum><header>Exception for constructive sales</header><text>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.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="H88205160E44D46CAAFBE43125449EFF9"><enum>(2)</enum><header>Broker information required with respect to options</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6045">Section 6045</external-xref>, as amended by subsection (a), is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H74E737E0A74942F298A761ECDE332D38" style="OLC">
<subsection commented="no" id="HA5825ACC8E09454B9481E4446D4EC70"><enum>(h)</enum><header>Application to options on securities</header>
<paragraph id="HA46846C665A54D5F964EFEB3BEAAC81"><enum>(1)</enum><header>Exercise of option</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H4241C64B7EAA4C5BAB7D77463DF174C2"><enum>(2)</enum><header>Lapse or closing transaction</header><text>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.</text> </paragraph>
<paragraph id="HE759BD1C94EA404692B7284EB1EE5308"><enum>(3)</enum><header>Prospective application</header><text>Paragraphs (1) and (2) shall not apply to any option which is granted or acquired before January 1, 2012.</text> </paragraph>
<paragraph id="HC0D4AC7BAF564E9FBC100579EEA9F552"><enum>(4)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this subsection, the terms <term>covered security</term> and <term>specified security</term> shall have the meanings given such terms in subsection (g)(3).</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="H95DE3C6CF26541D5B51FAFF7BD53EB53"><enum>(3)</enum><header>Extension of period for statements sent to customers</header>
<subparagraph commented="no" id="H4C92D3F82D3540EE88E4215DE65E5CD7"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/6045">section 6045</external-xref> is amended by striking <quote>January 31</quote> and inserting <quote>February 15</quote>.</text> </subparagraph>
<subparagraph commented="no" id="H3753DB19FC5B44278469738245905B7B"><enum>(B)</enum><header>Statements related to substitute payments</header><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/6045">section 6045</external-xref> is amended—</text>
<clause commented="no" id="HB88916E3C6F44487B8731D2F7D33E517"><enum>(i)</enum><text>by striking <quote>at such time and</quote>, and</text> </clause>
<clause commented="no" id="HB37DAF0961C6482180F612DBFD398E10"><enum>(ii)</enum><text>by inserting after <quote>other item.</quote> the following new sentence: <quote>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.</quote>.</text> </clause></subparagraph>
<subparagraph commented="no" display-inline="no-display-inline" id="HC5DD3FB5CAB04A439E6EB8FB6EB22BB1"><enum>(C)</enum><header>Other statements</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/6045">section 6045</external-xref> is amended by adding at the end the following: <quote>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.</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H072A53A5B959431890F7CE3FEC3C5B"><enum>(b)</enum><header>Determination of basis of certain securities on account by account or average basis method</header><text>Section 1012 (relating to basis of property–cost) is amended—</text>
<paragraph id="H4801127F45904D53BD9C02AD3B325849"><enum>(1)</enum><text>by striking <quote>The basis of property</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HCD40030028474B00A1CB7C12649C4FA4" style="OLC">
<subsection id="H81395F75B04A439DB8BDB1F27B30BCB2"><enum>(a)</enum><header>In general</header><text>The basis of property</text> </subsection><after-quoted-block>,</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H49DBF9733D3C4BD9B87F7E6DFED3C907"><enum>(2)</enum><text>by striking <quote>The cost of real property</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H589E17299E6345C58D5CBC8EFA7223" style="OLC">
<subsection id="H7CC80B2398A143E0955500EFEDC2366F"><enum>(b)</enum><header>Special rule for apportioned real estate taxes</header><text>The cost of real property</text> </subsection><after-quoted-block>, and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HD3CEAB44F8794670AB49D2BCE9A020F"><enum>(3)</enum><text>by adding at the end the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H75254A9EC3BC4616BF99BD2218746F98" style="OLC">
<subsection id="HB17AC907D1AF4A4A8EA76148B5C21DF8"><enum>(c)</enum><header>Determinations by account</header>
<paragraph id="HAF55547DBAFF490CBEC93BACFADCC6A9"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HE31DFAF0219448169EB9367517598895"><enum>(2)</enum><header>Application to open-end funds</header>
<subparagraph id="H7C508795C1114A5C845BE8278DB9C09"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H16E9CF50E0F245C280DAFFBC50ED5B"><enum>(B)</enum><header>Election by open-end fund for treatment as single account</header><text>If an open-end fund elects to have this subparagraph apply with respect to one or more of its stockholders—</text>
<clause id="H79D1F7BB3AE045E78E90CFB0A116CA12"><enum>(i)</enum><text>subparagraph (A) shall not apply with respect to any stock in such fund held by such stockholders, and</text> </clause>
<clause id="H4A23E6D659524B4389FD3526F56218D1"><enum>(ii)</enum><text>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.</text> </clause><continuation-text continuation-text-level="subparagraph">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.</continuation-text></subparagraph></paragraph>
<paragraph id="H6F2B60170C144E8D869CC26576DE87B4"><enum>(3)</enum><header>Definitions</header><text>For purposes of this section—</text>
<subparagraph display-inline="no-display-inline" id="H328863DD46CB45F1B63CCBBF80B30594"><enum>(A)</enum><header>Open-end fund</header><text display-inline="yes-display-inline">The term <term>open-end fund</term> 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.</text> </subparagraph>
<subparagraph id="HECFA87955AC846DEA8496DE605951258"><enum>(B)</enum><header>Specified security; applicable date</header><text>The terms <term>specified security</term> and <term>applicable date</term> shall have the meaning given such terms in section 6045(g).</text> </subparagraph></paragraph></subsection>
<subsection commented="no" id="HA7359CD8A1EB4F45B6F41E4C5C4929C"><enum>(d)</enum><header>Average basis for stock acquired pursuant to a dividend reinvestment plan</header>
<paragraph commented="no" id="HC15F5EB6D98645A38E142714B4B901EE"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph commented="no" id="H12C17F471E9D49D6A23200F622F01EDC"><enum>(2)</enum><header>Separate accounts; election for treatment as single account</header><text display-inline="yes-display-inline">Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.</text> </paragraph>
<paragraph commented="no" id="H4D0BFC1D786E41628E6F7673BFA597E2"><enum>(3)</enum><header>Dividend reinvestment plan</header><text>For purposes of this subsection—</text>
<subparagraph commented="no" id="HB41C61F10DE64177AF47E2B05FC90083"><enum>(A)</enum><header>In general</header><text>The term <term>dividend reinvestment plan</term> 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.</text> </subparagraph>
<subparagraph commented="no" id="H263D2FF1CBC54DE39E6273D90401D66B"><enum>(B)</enum><header>Initial stock acquisition treated as acquired in connection with plan</header><text>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.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HCC0C597FD4044CC2944400A3926B74FE"><enum>(c)</enum><header>Information by transferors T aid brokers</header>
<paragraph id="HB0D14F76DEED477CA77B8B34741200E4"><enum>(1)</enum><header>In general</header><text>Subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> is amended by inserting after section 6045 the following new section:</text>
<quoted-block id="H6479564854F740E785AD35C33598D3EE" style="OLC">
<section id="H52EF4019E35E48798828D06D83DDBD8"><enum>6045A.</enum><header>Information required in connection with transfers of covered securities to brokers</header>
<subsection id="HCAD2B8123560434AAA2BFEF38161097E"><enum>(a)</enum><header>Furnishing of information</header><text>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).</text> </subsection>
<subsection id="H67BA9B1D770240B400E4046120DE18E3"><enum>(b)</enum><header>Applicable person</header><text>For purposes of subsection (a), the term <term>applicable person</term> means—</text>
<paragraph id="HA3B2947850DA4B82BC9FF70863D8D329"><enum>(1)</enum><text>any broker (as defined in section 6045(c)(1)), and</text> </paragraph>
<paragraph id="H8C75F803D7A7468B90EC7C13F2E9BEB6"><enum>(2)</enum><text>any other person as provided by the Secretary in regulations.</text> </paragraph></subsection>
<subsection id="H452D2E2C5AD048DAAE0982F9B4B8F80"><enum>(c)</enum><header>Time for furnishing statement</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H889F5307628C46BEA4773CCFAA171B79"><enum>(2)</enum><header>Assessable penalties</header><text>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:</text>
<quoted-block id="H212E4CF5DF9342E29DA58396AB00ECED" style="OLC">
<subparagraph id="HAE670CBD2D8146418B41A6CEBC1B773D"><enum>(I)</enum><text>section 6045A (relating to information required in connection with transfers of covered securities to brokers).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H07BFA1541CD1482C96776154004B4D69"><enum>(3)</enum><header>Clerical amendment</header><text>The table of sections for subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> is amended by inserting after the item relating to section 6045 the following new item:</text>
<quoted-block id="H42C4B2F3990743AAAB036472E6B24FD" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 6045A. Information required in connection with transfers of covered securities to brokers.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H4552D2F736AA4451A7CDEA61CF40690"><enum>(d)</enum><header>Additional issuer information To aid brokers</header>
<paragraph id="H7203E37D2FDA4774943259A2A1D53336"><enum>(1)</enum><header>In general</header><text>Subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> of the Internal Revenue Code of 1986, as amended by subsection (b), is amended by inserting after section 6045A the following new section:</text>
<quoted-block id="HD9D41E867C0B4A739B02C2009C7DA526" style="OLC">
<section id="H33B8228032B04E36B1E6FCB2396EC05F"><enum>6045B.</enum><header>Returns relating to actions affecting basis of specified securities</header>
<subsection id="HFC56D4FF2EDB4FB9B7452EAA6069B7DE"><enum>(a)</enum><header>In general</header><text>According to the forms or regulations prescribed by the Secretary, any issuer of a specified security shall make a return setting forth—</text>
<paragraph id="H76BFCC8AEDEA415E81C000CC81D01BC1"><enum>(1)</enum><text>a description of any organizational action which affects the basis of such specified security of such issuer,</text> </paragraph>
<paragraph id="HFD3A9F71BCD94E208D77BFF28E84F850"><enum>(2)</enum><text>the quantitative effect on the basis of such specified security resulting from such action, and</text> </paragraph>
<paragraph id="H11FA54A5290F4743B9F8B0FE8D52F36D"><enum>(3)</enum><text>such other information as the Secretary may prescribe.</text> </paragraph></subsection>
<subsection id="HB2F3BA0AF63E4F8DB2CA21C1B5D839F"><enum>(b)</enum><header>Time for filing return</header><text>Any return required by subsection (a) shall be filed not later than the earlier of—</text>
<paragraph id="HDF9C89C92F494CDD8C169DC3ADEAF27D"><enum>(1)</enum><text>45 days after the date of the action described in subsection (a), or</text> </paragraph>
<paragraph commented="no" id="HE23306BE7D7840DAB4595C49EB4BD911"><enum>(2)</enum><text>January 15 of the year following the calendar year during which such action occurred.</text> </paragraph></subsection>
<subsection id="HD1BAEBB1C5DC4A758D73D224D40024C3"><enum>(c)</enum><header>Statements To be furnished to holders of specified securities or their nominees</header><text>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—</text>
<paragraph id="H618E8539E2DA489290C87E25C709BF1"><enum>(1)</enum><text>the name, address, and phone number of the information contact of the person required to make such return,</text> </paragraph>
<paragraph id="H5FF1C5C0C9F044C78E34C31265006668"><enum>(2)</enum><text>the information required to be shown on such return with respect to such security, and</text> </paragraph>
<paragraph id="H63B9602BB5724CF28BEEB93434FBECFD"><enum>(3)</enum><text>such other information as the Secretary may prescribe.</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection>
<subsection commented="no" id="H9718510E14DE41FC8EC10039DDC3B0A"><enum>(d)</enum><header>Specified security</header><text>For purposes of this section, the term <term>specified security</term> 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.</text> </subsection>
<subsection id="H250703268A3847DAADC5F25D3DB92E7D"><enum>(e)</enum><header>Public reporting in lieu of return</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H1221BA7ACD2643C197EAFE734E80E00"><enum>(1)</enum><text>the name, address, phone number, and email address of the information contact of such person, and</text> </paragraph>
<paragraph id="HBCB888081B764D2F8943C3897C3259EF"><enum>(2)</enum><text>the information described in paragraphs (1), (2), and (3) of subsection (a).</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H8D45903509834829AFAE713C38AA8992"><enum>(2)</enum><header>Assessable penalties</header>
<subparagraph id="HEEC5BD5C75E94F50B42CDFCD000080B5"><enum>(A)</enum><text>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:</text>
<quoted-block id="HEC980BA5D07C40D1BF4772494800D642" style="OLC">
<clause id="H4AA260AA8D6D4CFF94AB1DDF2BE6600"><enum>(iv)</enum><text>section 6045B(a) (relating to returns relating to actions affecting basis of specified securities),</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H10F10EFC0EE34068B98BCB28D303548C"><enum>(B)</enum><text>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:</text>
<quoted-block id="H46C01E9B117943FD003095D2DA826124" style="OLC">
<subparagraph id="HD01D3B875BA74A698F4831B588FEAEB1"><enum>(J)</enum><text>subsections (c) and (e) of section 6045B (relating to returns relating to actions affecting basis of specified securities).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H887ABFB5D15B46F68EC953E1AD257EDA"><enum>(3)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block id="H68F3C320B28048E098CCAD3091C60390" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 6045B. Returns relating to actions affecting basis of specified securities.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection commented="no" display-inline="no-display-inline" id="H6429BFE6911F4F6CB5209D45BE06ECA6"><enum>(e)</enum><header>Effective date</header>
<paragraph id="HCF413090186C4F539B12851D42B6EEB1"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall take effect on January 1, 2010.</text> </paragraph>
<paragraph id="H7202657D398F4E98A9B0F1D8D1D00BE"><enum>(2)</enum><header>Extension of period for statements sent to customers</header><text>The amendments made by subsection (a)(3) shall apply to statements required to be furnished after December 31, 2008.</text> </paragraph></subsection></section>
<section id="HE07386188559450B83F353C0A2517C7B"><enum>302.</enum><header>Delay in application of worldwide allocation of interest</header>
<subsection id="HFE1DEC85B810412ABAE3BA8ECF59E866"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraphs (5)(D) and (6) of section 864(f) are each amended by striking <quote>December 31, 2008</quote> and inserting <quote>December 31, 2009</quote>.</text> </subsection>
<subsection id="H7D334A79BBB84D28BFFACAA2A4C91EF"><enum>(b)</enum><header>Transitional rule</header><text>Subsection (f) of <external-xref legal-doc="usc" parsable-cite="usc/26/864">section 864</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H133E613CBE3141F286B0E2202552AE17" style="OLC">
<paragraph id="HB32AD652A2A74ACBAA0298DF991E3E27"><enum>(7)</enum><header>Transition</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H26BBBD2A2AB44101A0E108C31BA72D00"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2008.</text> </subsection></section>
<section id="H1346444067024CB8B956613F18708200"><enum>303.</enum><header>Time for payment of corporate estimated taxes</header>
<subsection id="H99F1DF8FEC584D11A3B5154D95F31731"><enum>(a)</enum><header>Repeal of adjustment for 2012</header><text>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 <quote>100 percent</quote>.</text> </subsection>
<subsection id="HB0A4469FE8A6477DAAD996192851F845"><enum>(b)</enum><header>Modification of adjustment for 2013</header><text display-inline="yes-display-inline">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.</text> </subsection></section>