Sec. 201. Housing and commercial development
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Section 36 of the Internal Revenue Code of 1986 is amended to read as follows: In the case of an individual who is a first-time homebuyer of a principal residence in an economically distressed community during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence. Except as otherwise provided in this paragraph, the credit allowed under subsection
(a)shall not exceed $8,000. In the case of a married individual filing a separate return, subparagraph
(A)shall be applied by substituting $4,000 for $8,000 . If two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection
(a)shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $8,000. In the case of a taxpayer to whom a credit under subsection
(a)is allowed by reason of subsection (c)(7), subparagraphs (A), (B), and
(C)shall be applied by substituting $6,500 for $8,000 and $3,250 for $4,000 . The amount allowable as a credit under subsection
(a)(determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so allowable as— the excess (if any) of— the taxpayer’s modified adjusted gross income for such taxable year, over $125,000 ($225,000 in the case of a joint return), bears to $20,000. For purposes of subparagraph (A), the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. No credit shall be allowed under subsection
(a)for the purchase of any residence if the purchase price of such residence exceeds $800,000. No credit shall be allowed under subsection
(a)with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section 7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer's spouse meets such age requirement. For purposes of this section— The term first-time homebuyer means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies. The term principal residence has the same meaning as when used in section 121. The term economically distressed community means any area identified as an economically distressed community for purposes of this section by the Secretary of Housing and Urban Development. For purposes of identifying areas as economically distressed communities for purposes of this section, the Secretary of Housing and Urban Development shall take into account the following: Percent of the population in such area which has attained age 25 and is without a high school degree. Percent of habitable housing in such area that is unoccupied, excluding properties that are for seasonal, recreational, or occasional use. Percent of the population in such area which has attained age 16 and is not currently employed. Percent of population in such area which is living under the poverty line. Ratio of such area’s median income to the median income of the State in which such area is located. Percent change in the number of employed individuals in such area in 2013 compared to 2010. Percent change in the number of business establishments in such areas in 2013 compared to 2010. Such other factors as such Secretary determines appropriate. The term purchase means any acquisition, but only if— the property is not acquired from a person related to the person acquiring such property (or, if married, such individual’s spouse), and the basis of the property in the hands of the person acquiring such property is not determined— in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or under section 1014(a) (relating to property acquired from a decedent). A residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence. The term purchase price means the adjusted basis of the principal residence on the date such residence is purchased. A person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267(b) and
(c)for purposes of this section, paragraph
(4)of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants). In the case of an individual (and, if married, such individual's spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence. No credit under subsection
(a)shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if— the taxpayer is a nonresident alien, the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer's spouse)) before the close of such taxable year, a deduction under section 151 with respect to such taxpayer is allowable to another taxpayer for such taxable year, or the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase. If the Secretary requires information reporting under section 6045 by a person described in subsection (e)(2) thereof to verify the eligibility of taxpayers for the credit allowable by this section, the exception provided by section 6045(e) shall not apply. If a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection
(a)(or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the end of the 5-year period beginning on the date of the purchase of such residence by the taxpayer, the tax imposed by this chapter for the taxable year of such disposition or cessation shall be increased by the amount of the credit so allowed. In the case of the sale of the principal residence to a person who is not related to the taxpayer, the increase in tax determined under paragraph
(1)shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection (a). Paragraph
(1)shall not apply to any taxable year ending after the date of the taxpayer’s death. Paragraph
(a)shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (1). Paragraph
(1)shall apply to such new principal residence during the 5-year period referred to therein in the same manner as if such new principal residence were the converted residence. In the case of a transfer of a residence to which section 1041(a) applies— paragraph
(1)shall not apply to such transfer, and in the case of taxable years ending after such transfer, paragraph
(1)shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor). In the case of a credit allowed under subsection
(a)with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection. If the tax imposed by this chapter for the taxable year is increased under this subsection, the taxpayer shall, notwithstanding section 6012, be required to file a return with respect to the taxes imposed under this subtitle. This section shall only apply to a principal residence purchased by the taxpayer after December 31, 2017, and before January 1, 2020. . The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 36 and inserting the following new item: Sec. 36. First-time homebuyer tax credit for economically distressed communities. . The amendments made by this section shall apply to principal residences purchased after December 31, 2017. Notwithstanding any provision of title I of the Emergency Economic Stabilization Act of 2008 ( 12 U.S.C. 5211 et seq.), any regulation, guidance, order, or other directive of the Secretary of the Treasury, or any agreement (or amendment thereto) entered into under the Hardest Hit Fund program of the Secretary under such title I, to the extent that any amounts of assistance that have been, or are, allocated for or provided to a State or State agency through the Hardest Hit Fund program may be used for demolishing and greening vacant and abandoned blighted residential properties and related expenses, such amounts may also be used for demolishing and greening vacant and abandoned blighted commercial properties and related expenses. Not later than the expiration of the 2-year period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit a report to the Congress regarding the impacts of using assistance provided under the Hardest Hit Fund program pursuant to the authority provided under paragraph
(1)and the effectiveness of such use.
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Sec. 201
Housing and commercial development
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