[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 776 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 776
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for the purchase of a principal residence by a first-time
homebuyer.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 3, 1993
Mrs. Johnson of Connecticut (for herself, Mrs. Roukema, Mr. Ravenel,
Mr. Burton of Indiana, Mr. Lewis of Florida, Mr. King, Mr. Gallegly,
Mr. Doolittle, Mr. Rohrabacher, Mr. Gilman, Mr. Sam Johnson of Texas,
Mr. Franks of Connecticut, Mr. Greenwood, and Mr. Shays), 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 a credit against
income tax for the purchase of a principal residence by a first-time
homebuyer.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. CREDIT FOR FIRST-TIME HOMEBUYERS.
(a) In General.--Subpart A of part IV of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after section 22 the
following new section:
``SEC. 23. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST-TIME HOMEBUYER.
``(a) Allowance of Credit.--If an individual who is a first-time
homebuyer purchases a principal residence (within the meaning of
section 1034), there shall be allowed to such individual as a credit
against the tax imposed by this subtitle an amount equal to 10 percent
of the purchase price of the principal residence.
``(b) Limitations.--
``(1) Maximum credit.--The credit allowed under subsection
(a) shall not exceed $2,500.
``(2) Limitation to one residence.--The credit under this
section shall be allowed with respect to only one residence of
the taxpayer.
``(3) Married individuals filing jointly.--In the case of a
husband and wife who file a joint return under section 6013,
the credit under this section is allowable only if both the
husband and wife are first-time homebuyers, and the amount
specified under paragraph (1) shall apply to the joint return.
``(4) Other taxpayers.--In the case of individuals to whom
paragraph (3) does not apply who together purchase the same new
principal residence for use as their principal residence, the
credit under this section is allowable only if each of the
individuals is a first-time homebuyer, and the sum of the
amount of credit allowed to such individuals shall not exceed
the lesser of $2,500 or 10 percent of the total purchase price
of the residence. The amount of any credit allowable under this
section shall be apportioned among such individuals under
regulations to be prescribed by the Secretary.
``(5) Application with other credits.--
``(A) General rule.--The credit allowed by
subsection (a) for any taxable year shall not exceed
the amount of the tax imposed by this chapter for the
taxable year, reduced by the sum of any other credits
allowable under this chapter.
``(B) Carryforward of unused credits.--Any credit
that is not allowed for the taxable year solely by
reason of subparagraph (A) shall be carried forward to
the succeeding taxable year and allowed as a credit for
that taxable year. However, the credit shall not be
carried forward more than 5 taxable years after the
taxable year in which the residence is purchased.
``(6) Year for which credit allowed.--Fifty percent of the
credit allowed by subsection (a) shall be allowed in the
taxable year in which the residence is purchased and the
remaining fifty percent of the credit shall be allowed in the
succeeding taxable year.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date of the
acquisition thereof.
``(2) First-time homebuyer.--
``(A) In general.--The term `first-time homebuyer'
means any individual if such individual has not had a
present ownership interest in any residence (including
an interest in a housing cooperative) at any time
within the 36-month period ending on the date of
acquisition of the residence on which the credit
allowed under subsection (a) is to be claimed. An
interest in a partnership, S corporation, or trust that
owns an interest in a residence is not considered an
interest in a residence for purposes of this paragraph
except as may be provided in regulations.
``(B) Certain individuals.--Notwithstanding
subparagraph (A), an individual is not a first-time
homebuyer on the date of purchase of a residence if on
that date the running of any period of time specified
in section 1034 is suspended under subsection (h) or
(k) of section 1034 with respect to that individual.
``(3) Special rules for certain acquisitions.--No credit is
allowable under this section if--
``(A) the residence is acquired from a person whose
relationship to the person acquiring it would result in
the disallowance of losses under section 267 or 707(b),
or
``(B) the basis of the residence in the hands of
the person acquiring it is determined--
``(i) in whole or in part by reference to
the adjusted basis of such residence in the
hands of the person from whom it is acquired,
or
``(ii) under section 1014(a) (relating to
property acquired from a decedent).
``(d) Recapture for Certain Dispositions.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), if the taxpayer disposes of property with respect to the
purchase of which a credit was allowed under subsection (a) at
any time within 36 months after the date the taxpayer acquired
the property as his principal residence, then the tax imposed
under this chapter for the taxable year in which the
disposition occurs is increased by an amount equal to the
amount allowed as a credit for the purchase of such property.
``(2) Acquisition of new residence.--If, in connection with
a disposition described in paragraph (1) and within the
applicable period prescribed in section 1034, the taxpayer
purchases a new principal residence, then the provisions of
paragraph (1) shall not apply and the tax imposed by this
chapter for the taxable year in which the new principal
residence is purchased is increased to the extent the amount of
the credit that could be claimed under this section on the
purchase of the new residence (determined without regard to
subsection (e)) is less than the amount of credit claimed by
the taxpayer under this section.
``(3) Death of owner; casualty loss; involuntary
conversion; etc.--The provisions of paragraph (1) do not apply
to--
``(A) a disposition of a residence made on account
of the death of any individual having a legal or
equitable interest therein occurring during the 36-
month period to which reference is made under paragraph
(1),
``(B) a disposition of the old residence if it is
substantially or completely destroyed by a casualty
described in section 165(c)(3) or compulsorily or
involuntarily converted (within the meaning of section
1033(a)), or
``(C) a disposition pursuant to a settlement in a
divorce or legal separation proceeding where the
residence is sold or the other spouse retains the
residence as a principal residence.
``(e) Property to Which Section Applies.--
``(1) In general.--The provisions of this section apply to
a principal residence if--
``(A) the taxpayer acquires the residence during
1993, or
``(B) the taxpayer enters into a binding contract
during 1993 to acquire the residence, and acquires and
occupies the residence before July 1, 1994.''
(b) Clerical Amendment.--The table of sections for subpart A of
part IV of chapter 1 of such Code is amended by inserting after section
22 the following new item:
``Sec. 23. Purchase of principal
residence by first-time
homebuyer.''
(c) Effective Date.--The amendments made by this section are
effective on January 1, 1993.
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