I 111th CONGRESS 1st Session H. R. 3207 IN THE HOUSE OF REPRESENTATIVES July 14, 2009 Mr. Abercrombie (for himself and Ms. Hirono) 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 from gross income gain on the sale of certain residential leased-fee interests to holders of the leasehold rights.

1.

Exclusion of gain from sales of certain residential leased-fee interests to holders of the leasehold rights

(a)

General rule

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139C the following new section:

139D.

Sales of certain residential leased-fee interests to holders of the leasehold rights

(a)

General rule

In the case of a fee simple owner-lessor, and legal and equitable owners, of qualified property, gross income does not include gain from the sale of such property to a holder of the leasehold right if such holder is— (1)an association of apartment owners of a multi-family residential leasehold property, or (2)a cooperative housing corporation for a residential leasehold property. (b)

Qualified property

For purposes of subsection (a), the term qualified property means the leased-fee interest to any residential house lot or the leased-fee interest in a condominium or co-operative housing apartment in a multi-family residential leasehold property. (c)

Other definitions

For purposes of this section (b)— (1)

Fee simple owner, leased-fee interest, legal and equitable owners

The terms fee simple owner, leased-fee interest, and legal and equitable owners shall have the same meaning as defined in Hawaii Revised Statutes section 516–1. (2)

Multi-family residential leasehold property, multi-family residential leasehold unit

The terms multi-family residential leasehold property and multi-family residential leasehold unit mean property or units within a planned unit development, condominium project, or cooperative housing project, as those terms are defined in Hawaii Revised Statutes section 514C–1. (d)

Termination

This section shall not apply to any taxable year beginning after December 31, 2014.

. (b)

Clerical amendment

The table of sections for such part is amended by inserting after the item relating to section 139C the following new item: Sec. 139D. Sales of certain residential leased-fee interests to holders of the leasehold rights. . (c)

Effective date

The amendments made by this section shall apply to sales after December 31, 2009.