,,ii  #aae? ,,congress  #b;d ,session   
,s4 #ccfd  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,augu/ #bb1 #bjah,mr4  
,wyd5 introduc$ ! foll[+ bill2 :i* 0    
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to create a       
refundable fir/-"t homebuy] tax cr$it4  
#a4 ,%ort title ,?is ,act may be cit$ z 
! ,fir/-,"t ,homebuy] ,cr$it ,act (     
#bjah4  #b4 ,fir/-"t homebuy] refundable
 cr$it  7a7 ,9 g5]al ,section #cf ( !   
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
to read z foll[s3  #cf4 ,fir/-"t        
homebuy] refundable cr$it  7a7 ,all[ance
 ( cr$it ,9 ! case ( an individual :o is
 a fir/-"t homebuy] ( a pr9cipal        
resid5ce 9 ! ,unit$ ,/ates dur+ a       
taxable ye>1 !re %all be all[$ z a cr$it
 aga9/ ! tax impos$ by ?is subtitle =   
su* taxable ye> an am\nt equal to #b4e  
p]c5t ( ! pur*ase price ( ! resid5ce4   
7b7 ,limitations2 special rules bas$ on 
m>ital & fil+ /atus  7#a7 ,doll>        
limitation ,! cr$it all[$ "u subsection 

7a7 %all n exce$ #aj1jjj4  7#b7         
,limitation bas$ on pur*ase price ,!    
am\nt all[able z a cr$it "u subsection  
7a7 7det]m9$ )\t reg>d to ?is p>agraph &
 p>agraph 7#c71 & aft] ! application (  
p>agraph 7#a77 = ! taxable ye> %all be  
r$uc$ 7b n bel[ z]o7 by ! am\nt :i* be>s
 ! same ratio to ! am\nt :i* is s       
all[able z--  7,a7 ! excess 7if any7 (--
 7i7 ! pur*ase price ( ! resid5ce1 ov]  
7ii7 #fjj1jjj1 be>s to  7,b7 #ajj1jjj4  
7#c7 ,limitation bas$ on modifi$ adju/$ 
gross income  7,a7 ,9 g5]al ,! am\nt    
all[able z a cr$it "u subsection 7a7    
7det]m9$ )\t reg>d to ?is p>agraph &    
aft] ! application ( p>agraphs 7#a7 &   
7#b77 = ! taxable ye> %all be r$uc$ 7b n
 bel[ z]o7 by ! am\nt :i* be>s ! same   
ratio to ! am\nt :i* is s all[able z--  
7i7 ! excess 7if any7 (-- 7,i7 !        
taxpay]'s modifi$ adju/$ gross income = 
su* taxable ye>1 ov]  7,,ii7 #hj1jjj    
7#afj1jjj 9 ! case ( a jo9t return71    
be>s to  7ii7 #bj1jjj4  7,b7 ,modifi$   
adju/$ gross income ,= purposes (       

subp>agraph 7,a71 ! t]m modifi$ adju/$  
gross income means ! adju/$ gross income
 ( ! taxpay] = ! taxable ye> increas$ by
 any am\nt exclud$ f gross income "u    
section #iaa1 #ica1 or #icc4  7#d7 ,age 
limitation ,no cr$it %all be all[$ "u   
subsection 7a7 ) respect to ! pur*ase ( 
any resid5ce = a taxable ye> if--  7,a7 
! taxpay] has n atta9$ age #ah z ( !    
date ( su* pur*ase1 or  7,b7 a d$uction 
"u section #aea ) respect to ! taxpay]  
is all[able to ano!r taxpay] = ! taxable
 ye>4  ,9 ! case ( a taxpay] :o is      
m>ri$1 ! taxpay] %all be treat$ z meet+ 
! age requirem5t ( subp>agraph 7,a7 if !
 taxpay] or ! taxpay]'s sp\se meets su* 
age requirem5t4  7#e7 ,multiple pur*as]s
 ,if two or m individuals :o are n m>ri$
 pur*ase a pr9cipal resid5ce1 ! am\nt ( 
! cr$it "u subsection 7a7 %all be       
allocat$ among su* individuals 9 su*    
mann] z ! ,secret>y may prescribe by    
tak+ into acc\nt ! requirem5ts (        
p>agraphs 7#b7 & 7#c71 except t ! total 
am\nt ( ! cr$its all[$ to all su*       

individuals %all n exce$ #aj1jjj4  7#f7 
,m>ri$ c\ples mu/ file jo9t return ,if  
an individual is m>ri$ at ! close ( !   
taxable ye>1 ! cr$it %all be all[$ "u   
subsection 7a7 only if ! individual & ! 
individual's sp\se file a jo9t return = 
! taxable ye>4  7c7 ,def9itions ,=      
purposes ( ?is section-- 7#a7 ,fir/-"t  
homebuy]  7,a7 ,9 g5]al ,! t]m fir/-"t  
homebuy] means any individual :o        
acquires a pr9cipal resid5ce by pur*ase 
if su* individual 7&1 if m>ri$1 su*     
individual's sp\se7--  7i7 has n claim$ 
any cr$it or d$uction "u ?is title = any
 previ\s taxable ye> ) respect to !     
pur*ase or own]%ip ( any resid5ce or    
resid5tial real e/ate 7includ+ = any    
exp5ditures relat+ to ! plac+ 9 s]vice (
 any prop]ty on1 9 connection )1 or =   
use 9 su* a resid5ce or real e/ate71 &  
7ii7 atte/s "u p5alty ( p]jury t-- 7,i7 
! individual 7&1 if m>ri$1 !            
individual's sp\se7 has n own$ a        
pr9cipal resid5ce at any "t prior to !  
pur*ase ( ! pr9cipal resid5ce to :i* ?is

 section applies1 &  7,,ii7 ! pr9cipal  
resid5ce to :i* ?is section applies 0 n 
acquir$ f a p]son relat$ to su*         
individual or sp\se4  7,b7 ,waiv] 9 case
 ( c]ta9 *anges 9 /atus ,! ,secret>y    
may1 9 su* mann] z ! ,secret>y may      
prescribe1 waive ! requirem5ts (        
subp>agraph 7,a7 = a taxable ye> 9 !    
case ( an individual :o is n eligible to
 file a jo9t return = ! taxable ye>1 &  
:o 0 m>ri$ at ! "t ! individual or !    
individual's =m] sp\se pur*as$ a previ\s
 resid5ce4  7#b7 ,pr9cipal resid5ce ,!  
t]m pr9cipal resid5ce has ! same mean+ z
 :5 us$ 9 section #aba4  7#c7 ,pur*ase  
7,a7 ,9 g5]al ,! t]m pur*ase means any  
acquisition1 b only if--  7i7 ! prop]ty 
is n acquir$ f a p]son relat$ to ! p]son
 acquir+ su* prop]ty 7or1 if ei!r su*   
p]son is m>ri$1 su* individual's sp\se71
 &  7ii7 ! basis ( ! prop]ty 9 ! h&s ( !
 p]son acquir+ su* prop]ty is n         
det]m9$-- 7,i7 9 :ole or 9 "p by ref]5ce
 to ! adju/$ basis ( su* prop]ty 9 ! h&s
 ( ! p]son f :om acquir$1 or  7,,ii7 "u 

section #ajad7;a74  7,b7 ,con/ruction ,a
 resid5ce :i* is con/ruct$ by ! taxpay] 
%all be treat$ z pur*as$ by ! taxpay] on
 ! date ! taxpay] fir/ occupies su*     
resid5ce4  7#d7 ,pur*ase price ,! t]m   
pur*ase price means ! adju/$ basis 7)\t 
reg>d to any r$uction "u section        
#ajaf7;a77#ch77 ( ! pr9cipal resid5ce on
 ! date su* resid5ce is pur*as$4  7#e7  
,relat$ p]sons ,a p]son %all be treat$ z
 relat$ to ano!r p]son if ! relation%ip 
betwe5 su* p]sons w\ld result 9 !       
disall[ance ( losses "u section #bfg or 
#gjg7;b7 7b1 9 apply+ subsections 7b7 & 
7c7 ( section #bfg = purposes ( ?is     
section1 p>agraph 7#d7 ( section        
#bfg7;c7 %all be treat$ z provid+ t !   
family ( an individual %all include only
 ! individual's sp\se1 ance/ors1 l9eal  
desc5dants1 & sp\se's ance/ors & l9eal  
desc5dants74  7#f7 ,m>ital /atus ,an    
individual's m>ital /atus %all be       
det]m9$ 9 accordance ) section #ggjc4   
7d7 ,d5ial & recapture rules 9 case (   
disposal ( resid5ce )9 #e taxable ye>s  

7#a7 ,d5ial ( cr$it 9 case ( disposal )9
 taxable ye> ,no cr$it "u subsection 7a7
 %all be all[$ to any taxpay] = any     
taxable ye> ) respect to ! pur*ase ( a  
resid5ce if ! taxpay] disposes ( su*    
resid5ce 7or su* resid5ce ceases to be !
 pr9cipal resid5ce ( ! taxpay] 7&1 if   
m>ri$1 ! taxpay]'s sp\se77 be=e ! close 
( su* taxable ye>4  7#b7 ,p>tial        
recapture  7,a7 ,9 g5]al ,except z      
provid$ 9 subp>agraph 7,d71 if ! taxpay]
 disposes ( ! resid5ce ) respect to :i* 
a cr$it 0 all[$ "u subsection 7a7 7or   
su* resid5ce ceases to be ! pr9cipal    
resid5ce ( ! taxpay] 7&1 if m>ri$1 !    
taxpay]'s sp\se77 dur+ ! #d-taxable-ye> 
p]iod beg9n+ ) ! taxable ye> imm$iately 
foll[+ ! cr$it ye>1 ! tax impos$ by ?is 
*apt] = ! taxable ye> 9 :i* su* disposal
 7or cessation7 occurs %all be increas$ 
by an am\nt equal to ! recapture        
p]c5tage ( ! am\nt ( ! cr$it s all[$4   
7,b7 ,cr$it ye> ,= purposes (           
subp>agraph 7,a71 ! t]m cr$it ye> means 
! taxable ye> 9 :i* ! cr$it "u          

subsection 7a7 0 all[$4  7,c7 ,recapture
 p]c5tage ,= purposes ( subp>agraph     
7,a71 ! recapture p]c5tage ) respect to 
any disposal or cessation describ$ 9 su*
 subp>agraph %all be det]m9$ 9          
accordance ) ! foll[+ table3 ,if !      
disposal or cessation,the recapture     
occurs 93p]c5tage is3,! #a/ taxable ye> 
beg9n+ aft] ! cr$it ye> #hj percent,the 
#bnd taxable ye> beg9n+ aft] ! cr$it ye>
 #fj percent,the #crd taxable ye> beg9n+
 aft] ! cr$it ye>#dj percent,the #d?    
taxable ye> beg9n+ aft] ! cr$it ye>#bj  
p]c5t4  7,d7 ,exceptions ,?is p>agraph  
%all n apply 9 ! case ( a disposal or   
cessation describ$ 9 subp>agraph 7,a7   
:i* occurs aft] or incid5t to any ( !   
foll[+3  7i7 ,dea? ( ! taxpay] or !     
taxpay]'s sp\se4  7ii7 ,divorce ( !     
taxpay]4  7iii7 ,involunt>y conv]sion ( 
! resid5ce 7)9 ! mean+ ( section        
#aba7;d77#e77;,a774  7iv7 ,relocation ( 
duty /ation or qualifi$ (ficial ext5d$  
duty 7z def9$ 9 section                 
#aba7;d77#i77;,c77 ( ! taxpay] or !     

taxpay]'s sp\se :o is a memb] ( ! uni=m$
 s]vices 7z def9$ 9 section             
#aba7;d77#i77;,c77ii771 a memb] ( !     
,=eign ,s]vice ( ! ,unit$ ,/ates 7z     
def9$ 9 section #aba7;d77#i77;,c77iii771
 or an employee ( ! intellig5ce         
community 7z def9$ 9 section            
#aba7;d77#i77;,c77iv774  7v7 ,*ange (   
employm5t ( ! taxpay] or ! taxpay]'s    
sp\se :i* meets ! conditions ( section  
#bag7;c74  7vi7 ,loss ( employm5t1 heal?
 conditions1 or su* o!r un=ese5         
circum/ances z may be specifi$ by !     
,secret>y4  7e7 ,adju/m5t to basis ,=   
purposes ( ?is subtitle1 if a cr$it is  
all[$ "u ?is section ) respect to any   
prop]ty1 ! taxpay]'s basis 9 su* prop]ty
 %all be r$uc$ by ! am\nt ( ! cr$it s   
all[$4  7f7 ,report+  7#a7 ,9 g5]al ,a  
cr$it %all be all[$ "u ?is section only 
if ! foll[+ are includ$ on ! return (   
tax3  7,a7 ,! individual's 7&1 if m>ri$1
 ! individual's sp\se's7 social security
 numb] issu$ by ! ,social ,security     
,adm9i/ration4  7,b7 ,! /reet address 7n

 includ+ a po/ (fice box7 ( ! pr9cipal  
resid5ce pur*as$4  7,c7 ,! pur*ase price
 ( ! pr9cipal resid5ce4  7,d7 ,! date ( 
pur*ase ( ! pr9cipal resid5ce4  7,e7 ,! 
clos+ disclosure relat+ to ! pur*ase 79 
! case ( a pur*ase f9anc$ by a          
mortgage74  7#b7 ,report+ ( real e/ate  
transactions ,if ! ,secret>y requires   
in=mation report+ "u section #fjde by a 
p]son describ$ 9 subsection 7e77#b7 !re(
 to v]ify ! eligibility ( taxpay]s = !  
cr$it all[able by ?is section1 !        
exception provid$ by section            
#fjde7;e77#e7 %all n apply4  4  7b7     
,con=m+ am5dm5t relat+ to basis adju/m5t
 ,subsection 7a7 ( section #ajaf ( !    
,int]nal ,rev5ue ,code ( #aihf is       
am5d$-- 7#a7 by /rik+ & at ! end (      
p>agraph 7#cf71  7#b7 by /rik+ ! p]iod  
at ! end ( p>agraph 7#cg7 & ins]t+ 1 &1 
&  7#c7 by add+ at ! end ! foll[+ new   
p>agraph3  7#ch7 to ! ext5t provid$ 9   
section #cf7;e74  4  7c7 ,con=m+ am5dm5t
 ,section #bf7;b77#b7 ( ! ,int]nal      
,rev5ue ,code ( #aihf is am5d$ by /rik+ 

subp>agraph 7,w7 & by r$esignat+        
subp>agraphs 7,x7 & 7,y7 z subp>agraphs 
7,w7 & 7,x71 respectively4  7d7 ,cl]ical
 am5dm5t ,! item relat+ to section #cf 9
 ! table ( sections = subp>t ,c ( "p    
,,iv ( sub*apt] ,a ( *apt] #a ( !       
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
to read z foll[s3  ,sec4 #cf4 ,fir/-"t  
homebuy] refundable cr$it4  4  7e7      
,au?ority ,to treat claim ( cr$it z     
error1 etc ,subp>agraph 7,n7 ( section  
#fbac7;g77#b7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ to read z foll[s3     
7,n7 9 ! case ( a return claim+ ! cr$it 
"u section #cf-- 7i7 ! omission ( a     
social security numb] requir$ "u section
 #cf7;f77#a77;,a71  7ii7 ! inclusion ( a
 social security numb] s requir$ if--   
7,i7 ! claim ( ! cr$it on ! return      
reflects ! treatm5t ( su* individual z  
be+ ( an age diff]5t f ! individual's   
age bas$ on su* social security numb]1  
or  7,,ii7 except z provid$ 9 section   
#cf7;c77#a77;,b71 su* social security   
numb] has be5 includ$ 7o!r ?an z a      

dep5d5t = purposes ( section #aea7 on a 
return = any previ\s taxable ye> claim+ 
any cr$it or d$uction describ$ 9 section
 #cf7;c77#a77;,a77i71  7iii7 ! omission 
( any o!r requir$ in=mation or          
docum5tation describ$ 9 section         
#cf7;f77#a71 includ+ ! inclusion ( a po/
 (fice box in/ead ( a /reet address = ! 
pur*as$ resid5ce1  7iv7 ! inclusion (   
any in=mation or docum5tation describ$ 9
 clause 7iii7 if su* in=mation or       
docum5tation does n support a valid     
claim = ! cr$it1 or  7v7 a claim ( su*  
cr$it = a taxable ye> ) respect to !    
pur*ase ( a resid5ce made aft] ! la/ day
 ( su* taxable ye>1 or  4  7f7 ,,irs    
recordkeep+ ,not)/&+ ! limitations on   
assessm5t & collection "u section #feja 
( ! ,int]nal ,rev5ue ,code ( #aihf1 !   
,commission] ( ,int]nal ,rev5ue %all    
ma9ta9 9 p]petuity records ( returns &  
return in=mation 7z def9$ 9 section     
#fajc7;b77#b7 ( su* ,code7 ( any taxpay]
 claim+ ! cr$it "u section #cf ( su*    
,code 7z am5d$ by ?is section7 = !      

taxable ye> 9 :i* su* cr$it is claim$ & 
succe$+ taxable ye>s4 ,! ,commission]   
may1 9 ! ,commission]'s discretion1     
disc>d su* records )9 a reasonable am\nt
 ( "t aft] ! dea? ( su* taxpay] 7&1 if  
m>ri$1 ! taxpay]'s sp\se74  7g7         
,effective date ,! am5dm5ts made by ?is 
section %all apply to resid5ces pur*as$ 
9 taxable ye>s beg9n+ aft] ,decemb] #ca1
 #bjah4