I 111th CONGRESS 1st Session H. R. 309 IN THE HOUSE OF REPRESENTATIVES January 8, 2009 Mr. Bilirakis (for himself and Mr. Putnam) 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 allow certain current and former service members to receive a refundable credit for the purchase of a principal residence.

1.

Short Title

This Act may be cited as the American Heroes’ Homeownership Assistance Act of 2009.

2.

Qualified Service Member Homebuyer Credit

(a)

In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36 the following new section:

36A.

Qualified Service Member Homebuyer Credit

(a)

Allowance of Credit

In the case of a qualified service member, or such service member’s surviving spouse, who purchases a principal residence, there shall be allowed to the taxpayer a credit against the tax imposed by this chapter an amount equal to 10 percent of the purchase price of such residence. (b)

Limitations

(1)

In General

Except as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $7,500. (2)

Married Individuals Filing Separately

In the case of a married individual filing a separate return, paragraph (1) shall be applied by substituting $3,750 for $7,500. (3)

Other Individuals

If two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such a manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $7,500. (4)

One-Time Only

If an individual receives a credit under subsection (a) for the purchase of a principal residence, such individual shall not be allowed a credit under subsection (a) with respect to the purchase of any other principal residence. The preceding sentence shall not apply to a principal residence with respect to which a credit is allowed under subsection (a) and to which subsection (e)(1) applies. (c)

Definitions

(1)

Qualified service member

The term qualified service member means a current or former service member who performs duty in a combat zone between the years 2001 and 2010. (2)

Service member

The term service member means a member of the uniformed services (as defined in section 101(a)(5) of title 10, United States Code). (3)

Combat Zone

The term combat zone has the meaning given such term by section 112(c)(2). (4)

Principal Residence

The term principal residence has the same meaning as when used in section 121. (5)

Purchase

(A)

In General

The term purchase means any acquisition, but only if— (i)the property is not acquired from a person related to the person acquiring it, and (ii)the basis of the property in the hands of the person acquiring it is not determined— (I)in whole or part by reference to the adjusted basis of such property in the hands of the person from whom acquired it, or (II)under section 1014(a) (relating to property acquired from a decedent). (B)

Construction

A residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies the residence. (6)

Purchase Price

The term purchase price means the adjusted basis of the principal residence on the date such residence is purchased. (7)

Related Persons

A person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b) (but in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants). (d)

Exceptions

No credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if— (1)credit under section 36 (relating to first-time homebuyer credit) or 1400C (relating to first-time homebuyer in the District of Columbia) is allowed to the taxpayer (or the taxpayer's spouse) for such taxable year or any prior taxable year, (2)the residence is financed by the proceeds of a qualified mortgage issue, the interest on which is exempt from tax under section 103, (3)the taxpayer is a nonresident alien, or (4)the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the close of such taxable year. (e)

Recapture of Credit

(1)

In General

Except as otherwise provided in this subsection, 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) before the end of the recapture period, the taxpayer shall take into gross income an amount equal to one half the credit allowed under subsection (a) in the first taxable year following such disposal or cessation and one half in the second taxable year following such disposal or cessation. (2)

Exceptions

(A)

Death of Taxpayer

Paragraph (1) shall not apply to any taxable year ending after the date of the taxpayer’s death. (B)

Involuntary Conversion

Paragraph (1) 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 (1). Paragraph (1) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence. (C)

Transfers Between Spouses or Incident to Divorce

In the case of a transfer of a residence to which section 1041(a) applies— (i)paragraph (1) shall not apply to such transfer, and (ii)in the case of taxable years ending after such transfer, paragraph (1) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor). (D)

Acquisition of New Principal Residence

Paragraph (1) shall not apply if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition. Paragraph (1) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the disposed residence. (3)

Recapture Period

For purposes of this subsection, the term recapture period means the taxable year following the taxable year for which a credit is allowed under subsection (a). (4)

Joint Returns

In the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection. (f)

Application of Section

This section shall only apply to principal residences purchased by the taxpayer before January 1, 2011.

. (b)

Conforming Amendments

(1)Section 26(b)(2) of such Code is amended by striking and at the end of subparagraph (W), by striking the period and inserting , and at the end of paragraph (X), and by inserting after subparagraph (X) the following new subparagraph: (Y)section 36A(e) (relating to recapture of qualified service member homebuyer credit). . (2)Section 6211(b)(4)(A) of such Code is amended by inserting 36A, after 36,. (3)Section 1324(b)(2) of title 31, United States Code, is amended by inserting 36A, after 36,. (4)The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36 the following new item: Sec. 36A. Qualified Service Member Homebuyer Credit. . (c)

Effective Date

The amendments made by this section shall apply to principal residences purchased by the taxpayer on or after the date of enactment of this Act.