[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9870 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 9870
To amend the Internal Revenue Code of 1986 to allow for nonrecognition
of gain on real property sold for use as affordable housing.
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IN THE HOUSE OF REPRESENTATIVES
July 22, 2026
Mr. Peters (for himself and Mr. Fitzpatrick) introduced the following
bill; which was referred to the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to allow for nonrecognition
of gain on real property sold for use as affordable housing.
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 ``Affordable Housing Incentives Act''.
SEC. 2. NONRECOGNITION OF GAIN ON PROPERTY SOLD FOR USE AS AFFORDABLE
HOUSING.
(a) In General.--Section 1033 of the Internal Revenue Code of 1986
is amended by redesignating subsection (k) as subsection (l) and by
inserting after subsection (j) the following new subsection:
``(k) Sales for Use as Affordable Housing.--
``(1) In general.--For purposes of this subtitle, if real
property is sold or otherwise transferred to a qualified
housing operator for use or development by such operator as
affordable housing and such property meets the requirements of
paragraphs (3), (4), and (5), such sale or transfer shall be
treated as an involuntary conversion to which this section
applies.
``(2) Qualified housing operator.--For purposes of this
section, the term `qualified housing operator' means any of the
following:
``(A) A State, tribal, or local government, or any
political subdivision or instrumentality thereof,
including a public housing agency (as defined in
subparagraph (A) or (B) of section 3(b)(6) of the
United States Housing Act of 1937 (42 U.S.C.
1437a(b)(6))).
``(B) A tribally designated housing entity (as such
term is defined in section 4 of the Native American
Housing Assistance and Self-Determination Act of 1996).
``(C) A community housing development organization
(as such term is defined in section 104 of the
Cranston-Gonzalez National Affordable Housing Act).
``(D) An organization which--
``(i) has the purpose of providing
affordable housing,
``(ii) has received Federal, State, or
local grant funds to develop or operate
affordable housing, or
``(iii) has owned (either directly or
through a partnership) an interest in a
qualified low-income housing project that is
allocated housing credit dollar amounts under
section 42 and materially participated (within
the meaning of section 469(h)) in the
development and operation of such project.
``(3) Affordable housing requirement.--The requirements of
this paragraph are met with respect to property if such
property has, as of the date of the sale or transfer referred
to in paragraph (1), a covenant or other binding legal
restriction sufficient to obligate, at all times during the 30-
year period beginning on such date, each owner of such property
with respect to the portion of such period during which such
owner owns such property, to maintain such property as either:
``(A) residential rental property (within the
meaning of section 168) that meets the requirements of
subparagraph (A), (B), or (C) of section 42(g)(1)
(applied by treating such property as a project), or
``(B) a shelter or property eligible for assistance
under title IV of the McKinney-Vento Homeless
Assistance Act, and
``(4) Notification of treasury.--
``(A) In general.--The requirements of this
paragraph are met with respect to any property if, not
later than 90 days after the date of the sale or
transfer referred to in paragraph (1), the transferor
notifies the Secretary of such transfer in such manner
as the Secretary may provide.
``(B) Enforcement obligations of treasury.--With
respect to each property to witch the Secretary
receives notification under subparagraph (A), the
Secretary shall ensure (not less often than every 5
years during the 30-year period described in paragraph
(3) that such property complies with the requirements
of paragraph (3)).
``(C) Audits.--The Secretary shall enforce the
affordability requirements of paragraph (3) through
audit procedures.
``(5) Sale price does not exceed qualified appraisal.--The
requirements of this paragraph are met with respect to any
property if--
``(A) the taxpayer attaches to the return of tax
for the taxable year which includes the date of the
sale or transfer of such property a qualified appraisal
(as defined section 170(f)(11)(E)) of such property,
and
``(B) the sale price of such property does not
exceed the amount determined in such appraisal.
``(6) Special rule for real property held for productive
use in trade or business.--For purposes of subsection (a), if
the real property described in paragraph (1) is held for
productive use in a trade or business or for investment,
property of a like kind to be held either for productive use in
a trade or business or for investment shall be treated as
property similar or related in service or use to the property
so described.
``(7) Regulations.--The Secretary may prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this subsection.''.
(b) Effective Date.--The amendment made by this section shall apply
to sales and transfers after the date of the enactment of this Act.
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