[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9431 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 9431

To amend the Internal Revenue Code of 1986 to exclude from gross income 
the discharge of indebtedness of certain individuals who are unlawfully 
                     or wrongfully detained abroad.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            August 30, 2024

  Mr. Bacon (for himself and Mr. Gottheimer) 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 
the discharge of indebtedness of certain individuals who are unlawfully 
                     or wrongfully detained abroad.

    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 ``Hostage Private Debt Tax Freedom 
Act''.

SEC. 2. EXCLUSION FROM GROSS INCOME OF DISCHARGE OF INDEBTEDNESS OF 
              CERTAIN INDIVIDUALS UNLAWFULLY OR WRONGFULLY DETAINED 
              ABROAD.

    (a) In General.--Section 108(a)(1) of the Internal Revenue Code of 
1986 is amended by striking ``or'' at the end of subparagraph (D), by 
striking the period at the end of subparagraph (E) and inserting ``, 
or'', and by adding at the end the following new subparagraph:
                    ``(F) in the case of a wrongfully detained abroad 
                individual or such individual's spouse, the 
                indebtedness discharged is specified wrongfully 
                detained indebtedness.''.
    (b) Rules Related to Wrongfully Detained Abroad Individuals.--
Section 108 of such Code is amended by adding at the end the following 
new subsection:
    ``(j) Provisions Related to Wrongfully Detained Abroad 
Individuals.--For purposes of this section--
            ``(1) In general.--The term `wrongfully detained abroad 
        individual' means any United States national (as defined in 
        section 307 of the Robert Levinson Hostage Recovery and 
        Hostage-Taking Accountability Act) if the Secretary of State 
        has determined for purposes of section 302(b) of such Act that 
        there is credible information that such United States national 
        is wrongfully or unlawfully detained abroad.
            ``(2) Specified wrongfully detained indebtedness.--
                    ``(A) In general.--The term `specified wrongfully 
                detained indebtedness' means, with respect to any 
                wrongfully detained abroad individual, any 
                indebtedness--
                            ``(i) which is discharged during the period 
                        beginning on the date on which such individual 
                        is first wrongfully or unlawfully detained and 
                        ending on the date that is 2 years after the 
                        conclusion of such detention, and
                            ``(ii) with respect to which the taxpayer 
                        elects (at such time and in such manner as the 
                        Secretary may provide) the application of this 
                        subparagraph.
                    ``(B) Dollar limitation.--The aggregate amount of 
                indebtedness which may be treated as specified 
                wrongfully detained indebtedness with respect to any 
                wrongfully detained abroad individual (including any 
                amount treated as such indebtedness with respect to 
                such individual's spouse) for any taxable year shall 
                not exceed the excess (if any) of $5,000 over the 
                aggregate amount so treated for all prior taxable 
                years.''.
    (c) Coordination of Exclusions.--
            (1) Coordination with title 11 exclusion.--Section 
        108(a)(2)(A) of such Code is amended by striking ``and (E)'' 
        and inserting ``(E), and (F)''.
            (2) Coordination with insolvency exclusion.--Section 
        108(a)(2) of such Code is amended by adding at the end the 
        following new subparagraph:
                    ``(D) Wrongfully detained abroad exclusion takes 
                precedence over insolvency and qualified farm 
                indebtedness exclusion unless elected otherwise.--
                Subparagraphs (B) and (C) of paragraph (1) shall not 
                apply to a discharge to which paragraph (1)(F) applies 
                unless the taxpayer elects to apply subparagraph (B) or 
                (C) of paragraph (1) in lieu of paragraph (1)(F).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges of indebtedness after December 31, 2023.
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