[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1526 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 1526

  To amend the Internal Revenue Code of 1986 to except from the early 
 distribution penalty certain qualified retirement plan distributions 
used to purchase a residence that has been in foreclosure for a year or 
                                 more.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 13, 2011

  Mr. Posey 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 except from the early 
 distribution penalty certain qualified retirement plan distributions 
used to purchase a residence that has been in foreclosure for a year or 
                                 more.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Housing Recovery Act of 2011''.

SEC. 2. EXCEPTION TO EARLY DISTRIBUTION PENALTY FOR DISTRIBUTION TO BUY 
              A RESIDENCE IN FORECLOSURE.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(H) Home foreclosure distribution.--
                            ``(i) In general.--Any distribution to an 
                        individual to the extent such distribution is 
                        used by the individual before the close of the 
                        120th day after the day on which such 
                        distribution is received to pay the cost of 
                        acquiring (within the meaning of paragraph 
                        (8)(C)) a residence which has been in 
                        foreclosure for the entire 1-year period ending 
                        on the date of such acquisition.
                            ``(ii) Required 2-year holding period.--If 
                        during the 2 year-period beginning on the date 
                        of such acquisition the individual disposes of 
                        such residence, then the individual shall be 
                        treated as having distributed from a qualified 
                        retirement plan the amount to which clause (i) 
                        applied with respect to such residence in the 
                        taxable year of such disposition.
                            ``(iii) Interest.--Any increase in tax 
                        under paragraph (1) by reason of clause (ii) 
                        shall include interest at the underpayment rate 
                        established under section 6621 on such increase 
                        for the period beginning on the due date for 
                        filing the return for the taxable year for 
                        which clause (i) applied with respect to such 
                        residence.''.
    (b) Conforming Amendment.--Clause (i) of section 401(k)(2)(B) of 
such Code is amended by striking ``or'' at the end of subclause (IV), 
by striking ``and'' at the end of subclause (V) and inserting ``or'', 
and by inserting after subclause (V) the following new subclause:
                                    ``(VI) as provided in section 
                                72(t)(2)(H), and''.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions made after the date of the enactment of this Act.
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