,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #hgg  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,febru>y #bg1 #bjac   
,mr4 ,turn] 7= himself1 ,mr4 ,holt1 ,mr4
 ,cicill9e1 ,mr4 ,langev91 ,mr4 ,higg9s1
 ,mr4 ,keat+1 ,mr4 ,blum5au]1 & ,mr4    
,/iv]s7 introduc$ ! foll[+ bill2 :i* 0  
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to exp& ! inc5tives = !  
rehabilitation ( old] build+s1 includ+  
own]-occupi$ resid5ces4  #a4 ,%ort title
 ,?is ,act may be cit$ z ! ,hi/oric     
,home[n]%ip ,revitalization ,act (      
#bjac4  #b4 ,hi/oric home own]%ip       
rehabilitation cr$it  7a7 ,9 g5]al      
,subp>t ,a ( "p ,,iv ( sub*apt] ,a (    
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf 7relat+ to nonrefundable p]sonal  
cr$its7 is am5d$ by ins]t+ aft] section 
#be;,d ! foll[+ new section3  #be;,e4   
,hi/oric home own]%ip rehabilitation    
cr$it  7a7 ,g5]al rule ,9 ! case ( an   
individual1 !re %all be all[$ z a cr$it 
aga9/ ! tax impos$ by ?is *apt] = !     

taxable ye> an am\nt equal to #bj p]c5t 
( ! qualifi$ rehabilitation exp5ditures 
made by ! taxpay] ) respect to a        
qualifi$ hi/oric home4  7b7 ,doll>      
limitation ,! cr$it all[$ by subsection 
7a7 ) respect to any resid5ce ( a       
taxpay] %all n exce$ #fj1jjj 7#cj1jjj 9 
! case ( a m>ri$ individual fil+ a      
sep>ate return74  7c7 ,qualifi$         
rehabilitation exp5diture ,= purposes ( 
?is section--  7#a7 ,9 g5]al ,! t]m     
qualifi$ rehabilitation exp5diture means
 any am\nt prop]ly *>geable to capital  
acc\nt--  7,a7 9 connection ) ! c]tifi$ 
rehabilitation ( a qualifi$ hi/oric     
home1 &  7,b7 = prop]ty = :i*           
depreciation w\ld be all[able "u section
 #afh if ! qualifi$ hi/oric home 7 us$ 9
 a trade or bus9ess4  7#b7 ,c]ta9       
exp5ditures n includ$  7,a7 ,ext]ior    
,su* t]m %all n include any exp5diture 9
 connection ) ! rehabilitation ( a      
build+ unless at lea/ #e p]c5t ( ! total
 exp5ditures made 9 ! rehabilitation    
process are allocable to !              

rehabilitation ( ! ext]ior ( su* build+4
  7,b7 ,o!r rules to apply ,rules simil>
 to ! rules ( clauses 7ii7 & 7iii7 (    
section #dg7;c77#b77;,b7 %all apply4    
7#c7 ,mix$ use or multifamily build+ ,if
 only a portion ( a build+ is us$ z !   
pr9cipal resid5ce ( ! taxpay]1 only     
qualifi$ rehabilitation exp5ditures :i* 
are prop]ly allocable to su* portion    
%all be tak5 into acc\nt "u ?is section4
  7d7 ,c]tifi$ rehabilitation ,=        
purposes ( ?is section--  7#a7 ,9 g5]al 
,! t]m c]tifi$ rehabilitation has !     
mean+ giv5 su* t]m by section           
#dg7;c77#b77;,c74  7#b7 ,approv$ ,/ate  
program ,! t]m c]tifi$ rehabilitation   
includes a c]tification made by--  7,a7 
a ,/ate ,hi/oric ,pres]vation ,(fic] :o 
adm9i/]s a ,/ate ,hi/oric ,pres]vation  
,program approv$ by ! ,secret>y ( !     
,int]ior pursuant to section            
#aja7;b77#a7 ( ! ,national ,hi/oric     
,pres]vation ,act1 or  7,b7 a local     
gov]nm5t1 c]tifi$ pursuant to section   
#aja7;c77#a7 ( ! ,national ,hi/oric     

,pres]vation ,act & au?oriz$ by a ,/ate 
,hi/oric ,pres]vation ,(fic]1 or !      
,secret>y ( ! ,int]ior :]e !re is no    
approv$ ,/ate program1 subject to su*   
t]ms & conditions z may be specifi$ by !
 ,secret>y ( ! ,int]ior = !             
rehabilitation ( build+s )9 !           
jurisdiction ( su* (fic] 7or local      
gov]nm5t7 = purposes ( ?is section4  7e7
 ,def9itions & special rules ,= purposes
 ( ?is section--  7#a7 ,qualifi$ hi/oric
 home ,! t]m qualifi$ hi/oric home means
 a c]tifi$ hi/oric /ructure--  7,a7 :i* 
has be5 sub/antially rehabilitat$1 &    
7,b7 :i* 7or any portion ( :i*7--  7i7  
is own$ by ! taxpay]1 &  7ii7 is us$ 7or
 w1 )9 a reasonable p]iod1 be us$7 by   
su* taxpay] z 8 pr9cipal resid5ce4  7#b7
 ,sub/antially rehabilitat$ ,! t]m      
sub/antially rehabilitat$ has ! mean+   
giv5 su* t]m by section                 
#dg7;c77#a77;,c74  7#c7 ,pr9cipal       
resid5ce ,! t]m pr9cipal resid5ce has ! 
same mean+ z :5 us$ 9 section #aba4     
7#d7 ,c]tifi$ hi/oric /ructure ,! t]m   

c]tifi$ hi/oric /ructure means any      
build+ 7& its /ructural compon5ts7 :i*--
  7,a7 is li/$ 9 ! ,national ,regi/]1 or
  7,b7 is locat$ 9 a regi/]$ hi/oric    
di/rict 7z def9$ 9 section              
#dg7;c77#c77;,b77 & is c]tifi$ by !     
,secret>y ( ! ,int]ior z be+ ( hi/oric  
significance to ! di/rict4  7#e7        
,rehabilitation n complete be=e         
c]tification ,a rehabilitation %all n be
 treat$ z complete be=e ! date ( !      
c]tification ref]r$ to 9 subsection 7d74
  7#f7 ,t5ant-/ockhold] 9 coop]ative    
h\s+ corporation ,if ! taxpay] holds    
/ock z a t5ant-/ockhold] 7z def9$ 9     
section #baf7 9 a coop]ative h\s+       
corporation 7z def9$ 9 su* section71 su*
 /ockhold] %all be treat$ z own+ ! h\se 
or ap>tm5t :i* ! taxpay] is entitl$ to  
occupy z su* /ockhold]4  7#g7           
,allocation ( exp5ditures relat+ to     
ext]ior ( build+ conta9+ coop]ative or  
condom9ium units ,! p]c5tage ( ! total  
exp5ditures made 9 ! rehabilitation ( a 
build+ conta9+ coop]ative or condom9ium 

resid5tial units allocat$ to !          
rehabilitation ( ! ext]ior ( ! build+   
%all be attribut$ proportionately to ea*
 coop]ative or condom9ium resid5tial    
unit 9 su* build+ = :i* a cr$it "u ?is  
section is claim$4  7#h7 ,c>ryback &    
c>ry=w>d ( cr$it unus$ by reason (      
limitation bas$ on tax liability  7,a7  
,9 g5]al ,if ! cr$it all[able "u        
subsection 7a7 = any taxable ye> exce$s 
! tax limit = su* taxable ye>1 su*      
excess %all be a c>ryback to ! prec$+   
taxable ye> & a c>ry=w>d to ea* ( ! #c  
succe$+ taxable ye>s &1 subject to !    
limitations ( subp>agraph 7,b71 %all be 
add$ to ! cr$it all[able by subsection  
7a7 = su* prec$+ or succe$+ taxable ye>1
 z ! case may be4  7,b7 ,am\nt c>ri$ to 
ea* ye> ,rules simil> to ! rules (      
section #ci7;a77#b7 %all apply =        
purposes ( ?is p>agraph4  7,c7          
,limitation ,! am\nt ( ! unus$ cr$it :i*
 may be tak5 into acc\nt "u subp>agraph 
7,a7 = any taxable ye> %all n exce$ !   
am\nt 7if any7 by :i* ! tax limit = su* 

taxable ye> exce$s ! sum (--  7i7 !     
cr$it all[able "u subsection 7a7 = su*  
taxable ye> det]m9$ )\t reg>d to ?is    
p>agraph1 &  7ii7 ! am\nts :i*1 by      
reason ( ?is p>agraph1 are c>ri$ to su* 
taxable ye> & are attributable to       
taxable ye>s be=e ! unus$ cr$it ye>4    
7,d7 ,tax limit ,= purposes ( ?is       
p>agraph1 ! t]m tax limit means !       
limitation impos$ by section #bf7;a7 = !
 taxable ye> r$uc$ by ! sum ( ! cr$its  
all[able "u ?is subp>t 7o!r ?an ?is     
section74  7#i7 ,cr$it may be assign$ ,!
 am\nt ( qualifi$ rehabilitation        
exp5ditures :i* w\ld 7b = ?is p>agraph7 
be tak5 into acc\nt "u subsection 7a7 = 
any taxable ye> by any p]son 7h]eaft] 9 
?is p>agraph ref]r$ to z ! initial      
taxpay]7--  7,a7 may be tak5 into acc\nt
 by any o!r p]son to :om su* exp5ditures
 are assign$ by ! initial taxpay]1 &    
7,b7 %all n be tak5 to acc\nt by initial
 taxpay]4  ,any p]son to :om su*        
exp5ditures are assign$ "u subp>agraph  
7,a7 %all be treat$ = purposes ( ?is    

title z ! taxpay] ) respect to su*      
exp5ditures4  7f7 ,:5 exp5ditures tak5  
into acc\nt ,9 ! case ( a build+ o!r ?an
 a build+ to :i* subsection 7g7 applies1
 qualifi$ rehabilitation exp5ditures    
%all be treat$ = purposes ( ?is section 
z made--  7#a7 on ! date !              
rehabilitation is complet$1 or  7#b7 to 
! ext5t provid$ by ! ,secret>y by       
regulation1 :5 su* exp5ditures are      
prop]ly *>geable to capital acc\nt4     
,regulations "u p>agraph 7#b7 %all      
include a rule simil> to ! rule "u      
section #ej7;a77#b7 7relat+ to recapture
 if prop]ty ceases to qualify = progress
 exp5ditures74  7g7 ,all[ance ( cr$it = 
pur*ase ( rehabilitat$ hi/oric home     
7#a7 ,9 g5]al ,9 ! case ( a qualifi$    
pur*as$ hi/oric home1 ! taxpay] %all be 
treat$ z hav+ made 7on ! date ( pur*ase7
 ! exp5ditures made by ! sell] ( su*    
home4 ,= purposes ( ! prec$+ s5t5ce1    
exp5ditures made by ! sell] %all be     
deem$ to be qualifi$ rehabilitation     
exp5ditures if su* exp5ditures1 if made 

by ! pur*as]1 w\ld be qualifi$          
rehabilitation exp5ditures4  7#b7       
,qualifi$ pur*as$ hi/oric home ,=       
purposes ( ?is subsection1 ! t]m        
qualifi$ pur*as$ hi/oric home means any 
sub/antially rehabilitat$ c]tifi$       
hi/oric /ructure pur*as$ by ! taxpay]   
if--  7,a7 ! taxpay] is ! fir/ pur*as] (
 su* /ructure aft] ! date rehabilitation
 is complet$1 & ! pur*ase occurs )9 #e  
ye>s aft] su* date1  7,b7 ! /ructure 7or
 a portion !re(7 w1 )9 a reasonable     
p]iod1 be ! pr9cipal resid5ce ( !       
taxpay]1  7,c7 no cr$it 0 all[$ to !    
sell] "u ?is section or section #dg )   
respect to su* rehabilitation1 &  7,d7 !
 taxpay] is furni%$ ) su* in=mation z ! 
,secret>y det]m9es is necess>y to       
det]m9e ! cr$it "u ?is subsection4  7h7 
,recapture  7#a7 ,9 g5]al ,if1 be=e !   
end ( ! #e-ye> p]iod beg9n+ on ! date on
 :i* ! rehabilitation ( ! build+ is     
complet$ 7or1 if subsection 7g7 applies1
 ! date ( pur*ase ( su* build+ by !     
taxpay]7--  7,a7 ! taxpay] disposes (   

su* taxpay]'s int]e/ 9 su* build+1 or   
7,b7 su* build+ ceases to be us$ z !    
pr9cipal resid5ce ( ! taxpay] or ceases 
to be a c]tifi$ hi/oric /ructure1 !     
taxpay]'s tax impos$ by ?is *apt] = !   
taxable ye> 9 :i* su* disposition or    
cessation occurs %all be increas$ by !  
recapture p]c5tage ( ! cr$it all[$ "u   
?is section = all prior taxable ye>s )  
respect to su* rehabilitation4  7#b7    
,recapture p]c5tage ,= purposes (       
p>agraph 7#a71 ! recapture p]c5tage %all
 be det]m9$ 9 accordance ) ! table "u   
section #ej7;a77#a77;,b71 deem+ su*     
table to be am5d$--  7,a7 by /rik+ ,if !
 prop]ty ceases to be inve/m5t cr$it    
prop]ty )9-- & ins]t+ ,if ! disposition 
or cessation occurs )9--1 &  7,b7 9     
clause 7i7 by /rik+ ,"o full ye> aft]   
plac$ 9 s]vice & ins]t+ ,"o full ye>    
aft] ! taxpay] becomes entitl$ to !     
cr$it4  7#c7 ,transf] betwe5 sp\ses or  
incid5t to divorce ,9 ! case ( any      
transf] describ$ 9 subsection 7a7 (     
section #ajda 7relat+ to transf]s betwe5

 sp\ses or incid5t to divorce7--  7,a7 !
 =ego+ provisions ( ?is subsection %all 
n apply1 &  7,b7 ! same tax treatm5t "u 
?is subsection ) respect to ! transf]r$ 
prop]ty %all apply to ! transf]ee z w\ld
 h appli$ to ! transf]or4  7i7 ,basis   
adju/m5ts ,= purposes ( ?is subtitle1 if
 a cr$it is all[$ "u ?is section = any  
exp5diture ) respect to any prop]ty     
7includ+ any pur*ase "u subsection 7g771
 ! increase 9 ! basis ( su* prop]ty :i* 
w\ld 7b = ?is subsection7 result f su*  
exp5diture %all be r$uc$ by ! am\nt ( ! 
cr$it s all[$4  7j7 ,process+ fees ,any 
,/ate may impose a fee = ! process+ (   
applications = ! c]tification ( any     
rehabilitation "u ?is section provid$ t 
! am\nt ( su* fee is us$ only to defray 
exp5ses associat$ ) ! process+ ( su*    
applications4  7k7 ,d5ial ( d\ble b5efit
 ,no cr$it %all be all[$ "u ?is section 
= any am\nt = :i* cr$it is all[$ "u     
section #dg4  7l7 ,regulations ,!       
,secret>y %all prescribe su* regulations
 z may be appropriate to c>ry out !     

purposes ( ?is section1 includ+         
regulations :]e less ?an all ( a build+ 
is us$ z a pr9cipal resid5ce & :]e m ?an
 #a taxpay] use ! same dwell+ unit z _! 
pr9cipal resid5ce4  4  7b7 ,con=m+      
am5dm5ts  7#a7 7,a7 ,subp>agraph 7,c7 ( 
section #be7;e77#a7 ( su* ,code is am5d$
 by ins]t+ #be;,e1 aft] sections        
#be;,d14  7,b7 ,section #be;,d7c7 ( su* 
,code is am5d$ by ins]t+ & section      
#be;,e aft] 7o!r ?an ?is section4  7,c7 
,section #adjj;,c7d7 ( su* ,code is     
am5d$ by /rik+ section #be;,d & ins]t+  
sections #be;,d & #be;,e4  7#b7         
,subsection 7a7 ( section #ajaf ( su*   
,code is am5d$ by /rik+ & at ! end (    
p>agraph 7#cf71 by /rik+ ! p]iod at !   
end ( p>agraph 7#cg7 & ins]t+ 1 &1 & by 
add+ at ! end ! foll[+ new item3  7#ch7 
to ! ext5t provid$ 9 section #be;,e7i74 
4  7c7 ,cl]ical am5dm5t ,! table (      
sections = subp>t ,a ( "p ,,iv (        
sub*apt] ,a ( *apt] #a ( su* ,code is   
am5d$ by ins]t+ aft] ! item relat+ to   
section #be;,d ! foll[+ new item3  ,sec4

 #be;,e4 ,hi/oric home own]%ip          
rehabilitation cr$it44  7d7 ,effective  
date ,! am5dm5ts made by ?is section    
%all apply ) respect to rehabilitations 
! physical "w on :i* beg9s aft] ! date (
 enactm5t ( ?is ,act4  #c4 ,expansion ( 
inc5tives = build+ rehabilitation  7a7  
,increase 9 rehabilitation cr$it =      
build+s 9 high co/ areas ,p>agraph 7#b7 
( subsection #dg7;c7 ( su* ,code 7def9+ 
qualifi$ rehabilitation exp5ditures7 is 
am5d$ by add+ at ! end ! foll[+ new     
subp>agraph3  7,e7 ,increase 9 cr$it =  
build+s 9 high co/ areas ,9 ! case ( any
 qualifi$ rehabilitat$ build+ :i* is    
resid5tial r5tal prop]ty 7z def9$ 9     
subp>agraph 7,d77 locat$ 9 a qualifi$   
c5sus tract or difficult developm5t area
 :i* is designat$ = purposes ( section  
#db7;d77#e77;,c71 ! qualifi$            
rehabilitation exp5ditures tak5 into    
acc\nt "u ?is section %all be #acj p]c5t
 ( su* exp5ditures det]m9$ )\t reg>d to 
?is subp>agraph4  4  7b7 ,rehabilitation
 cr$it may be transf]r$  7#a7 ,9 g5]al  

,subsection 7b7 ( section #dg ( su*     
,code 7relat+ to :5 exp5ditures tak5    
into acc\nt7 is am5d$ by add+ at ! end !
 foll[+ new p>agraph3  7#c7 ,cr$it may  
be assign$ ,! am\nt ( qualifi$          
rehabilitation exp5ditures ) respect to 
prop]ty describ$ 9 :i* w\ld 7b = ?is    
p>agraph7 be tak5 into acc\nt "u        
subsection 7a7 = any taxable ye> by any 
p]son 7h]eaft] 9 ?is p>agraph ref]r$ to 
z ! initial taxpay]7--  7,a7 may be tak5
 into acc\nt by any o!r p]son to :om su*
 exp5ditures are assign$ by ! initial   
taxpay]1 &  7,b7 %all n be tak5 to      
acc\nt by initial taxpay]4  ,any p]son  
to :om su* exp5ditures are assign$ "u   
subp>agraph 7,a7 %all be treat$ =       
purposes ( ?is title z ! taxpay] )      
respect to su* exp5ditures4  4  7#b7    
,con=m+ am5dm5t ,! head+ = su*          
subsection 7b7 is am5d$ by ins]t+ 2     
eligibility = cr$it may be assign$ aft] 
acc\nt4  7c7 ,applicability to build+s  
held = sale  7#a7 ,9 g5]al  7,a7 ,clause
 7iv7 ( section #dg7;c77#a77;,a7 ( su*  

,code is am5d$ to read z foll[s3  7iv7  
depreciation 7or amortization 9 lieu (  
depreciation7--  7,i7 is all[able )     
respect to su* build+1 or  7,,ii7 9 !   
case ( a resid5tial prop]ty1 w\ld be    
all[able ) respect to su* build+ b = !  
build+ be+ held = sale4  4  7,b7        
,p>agraph 7#b7 ( section #dg7;c7 ( su*  
,code is am5d$ by add+ at ! end ! foll[+
 new subp>agraph3  7,e7 ,special rule = 
c]ta9 prop]ty held = sale ,= purposes ( 
?is p>agraph1 9 ! case ( a qualifi$     
rehabilitat$ build+ describ$ 9 p>agraph 
7#a77;,a77iv77,,ii71 su* build+ %all be 
treat$ z own$ by ! taxpay] z r5tal      
prop]ty ) respect to :i* ! /raight l9e  
depreciation me?od is us$ ov] a recov]y 
p]iod det]m9$ "u subsection 7c7 or 7g7 (
 section #afh4  4  7#b7 ,con=m+ am5dm5t 
,p>agraph 7#d7 ( section #ej7;a7 ( su*  
,code is am5d$ by /rik+ or at ! end (   
subp>agraph 7,a71 b /rik+ ! p]iod at !  
end ( subp>agraph 7,b7 & ins]t+ 1 or1 & 
by ins]t+ aft] subp>agraph 7,b7 ! foll[+
 new subp>agraph3  7,c7 prop]ty describ$

 9 section #dg7;c77#a77;,a77iv77,,ii7 t 
has n o!rwise ceas$ to be inve/m5t      
prop]ty4  4  7d7 ,effective date ,!     
am5dm5ts made by ?is section %all apply 
) respect to rehabilitations ! physical 
"w on :i* beg9s aft] ! date ( enactm5t (
 ?is ,act4