I 111th CONGRESS 1st Session H. R. 2851 IN THE HOUSE OF REPRESENTATIVES June 12, 2009 Mr. Brady of Texas (for himself, Mr. Sessions, and Mr. Austria) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to exclude certain gains on single-family residential rental property from gross income.

1.

Short title

This Act may be cited as the Neighborhood Investment Act of 2009.

2.

Certain gains on single-family residential rental property excluded from gross income

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139C the following new section:

139D.

Certain gains on single-family residential rental property

(a)

In general

Gross income shall not include any gain from the sale or exchange of a qualified single-family residential rental property. (b)

Limitation

The amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000. (c)

Qualified single-family residential rental property

For purposes of this section— (1)

In general

The term qualified property means any real property located in the United States which— (A)was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) during the period beginning on the date of the enactment of this section and ending on June 30, 2010, (B)was held by the taxpayer for 2 years or more, and (C)was rented as a single dwelling unit on a regular basis during 2 of the taxable years in the 5 taxable year period ending with the taxable year in which the property was sold or exchanged. (2)

Regular basis

For purposes of paragraph (1)(C), property shall not be treated as rented on a regular basis during any taxable year unless— (A)such property is rented on the basis of months or longer periods, and (B)such property is rented for not less than 6 months of such year. (d)

Exception for nonresident alien individuals

No credit shall be allowed under subsection (a) to any taxpayer if such taxpayer is a nonresident alien individual.

. (b)

Clerical amendment

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139C the following new item: Sec. 139D. Certain gains on single-family residential rental property. . (c)

Effective date

The amendments made by this section shall apply to property acquired after the date of the enactment of this Act.