Amends the Internal Revenue Code to allow a first-time homebuyer who purchases a principal residence a tax credit of ten percent of the purchase price of such residence. Limits the credit to $5,000. Requires married individuals filing jointly to both be first-time homebuyers. Allows the use of 50 percent of the credit in the first taxable year in which the residence is purchased and the remaining 50 percent in the succeeding taxable year. Makes this credit applicable to residences acquired after January 1, 1992, and before January 1, 1993, or for which a binding contract is entered into during such period.
HR 5023 IH 102d CONGRESS 2d Session H. R. 5023 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 April 29, 1992 Mr. SOLOMON 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 subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) 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 $5,000. `(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 $5,000 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 on or after January 1, 1992, and before January 1, 1993, or `(B) the taxpayer enters into, on or after January 1, 1992, and before January 1, 1993, a binding contract to acquire the residence, and acquires and occupies the residence before July 1, 1993.' (b) CLERICAL AMENDMENT- The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to 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 shall take effect on January 1, 1992.
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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