,i  #aag? ,,congress  #a/ ,session  ,h4 
,r4 #bhfc  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,april #bh1 #bjba ,mr4
 ,blum5au] 7= himself & ,mr4 ,panetta7  
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,ways & ,means  ,a     
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code to provide = a fir/-"t homebuy]   
cr$it1 & = o!r purposes4  #a4 ,%ort     
title ,?is ,act may be cit$ z !         
,fir/-,"t ,homebuy] ,act ( #bjba4  #b4  
,fir/-"t homebuy] refundable tax cr$it  
7a7 ,9 g5]al ,section #cf ( ! ,int]nal  
,rev5ue ,code ( #aihf is am5d$ to read z
 foll[s3  #cf4 ,fir/-"t homebuy] 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 #aj
 p]c5t ( ! pur*ase price ( ! resid5ce4  
7b7 ,limitations  7#a7 ,doll> limitation
  7,a7 ,9 g5]al ,except z o!rwise       
provid$ 9 ?is p>agraph1 ! cr$it all[$ "u

 subsection 7a7 %all n exce$ #ae1jjj4   
7,b7 ,m>ri$ individuals fil+ sep>ately  
,9 ! case ( a m>ri$ individual fil+ a   
sep>ate return1 subp>agraph 7,a7 %all be
 appli$ by sub/itut+ #g1ejj = #ae1jjj4  
7,c7 ,o!r individuals ,if two or m      
individuals :o are n m>ri$ pur*ase a    
pr9cipal resid5ce1 ! am\nt ( ! cr$it    
all[$ "u subsection 7a7 %all be allocat$
 among su* individuals 9 su* mann] z !  
,secret>y may prescribe1 except t !     
total am\nt ( ! cr$its all[$ to all su* 
individuals %all n exce$ #ae1jjj4  7#b7 
,limitation bas$ on area m$ian income   
7,a7 ,9 g5]al ,no cr$it %all be all[$ "u
 subsection 7a7 to a taxpay] ) a modifi$
 adju/$ gross income t is great] ?an !  
applicable am\nt4  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,c7 ,applicable am\nt  
7i7 ,9 g5]al ,= purposes ( subp>agraph  

7,a71 ! t]m applicable am\nt means an   
am\nt t is equal to #afj p]c5t ( ! ,area
 ,m$ian ,income set by ! ,secret>y (    
,h\s+ & ,urban ,developm5t ) respect    
to-- 7,i7 ! area 9 :i* ! pr9cipal       
resid5ce is locat$1  7,,ii7 ! size ( !  
h\sehold ( ! taxpay]1 &  7,,iii7 !      
cal5d> ye> 9 :i* ! pr9cipal resid5ce is 
pur*as$4  7ii7 ,regulations & guidance  
,! ,secret>y1 aft] consultation ) !     
,secret>y ( ,h\s+ & ,urban ,developm5t1 
%all promulgate su* regulations &       
guidance z are necess>y to c>ry out !   
purposes ( ?is subp>agraph4  7#c7       
,limitation bas$ on area m$ian pur*ase  
price  7,a7 ,9 g5]al ,! am\nt all[able z
 a cr$it "u subsection 7a7 7det]m9$ )\t 
reg>d to ?is p>agraph7 %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 ! pur*ase
 price ( ! prim>y resid5ce1 ov]  7,,ii7 
! am\nt :i* is equal to #aaj p]c5t ( !  
area m$ian pur*ase price1 be>s to  7ii7 
! am\nt :i* is equal to #abe p]c5t ( !  

area m$ian pur*ase price4  7,b7 ,area   
m$ian pur*ase price ,= purposes ( ?is   
p>agraph1 ! t]m area m$ian pur*ase price
 means ! av]age pur*ase price = a home 9
 bo? ! area & ! cal5d> ye> 9 :i* !      
pur*ase ( ! prim>y resid5ce takes place4
  7,c7 ,regulations & guidance ,!       
,secret>y1 aft] consultation ) !        
,secret>y ( ,h\s+ & ,urban ,developm5t1 
%all promulgate su* regulations &       
guidance z are necess>y to c>ry out !   
purposes ( ?is subp>agraph1 includ+     
sett+ pur*ase price limitations = !     
cr$it "u subsection 7a7 bas$ on area    
m$ian income4  7#d7 ,inflation adju/m5t 
,9 ! case ( any taxable ye> beg9n+ 9 a  
cal5d> ye> aft] #bjba1 ea* ( ! doll>    
am\nts 9 p>agraph 7#a7 %all be increas$ 
by an am\nt equal to-- 7,a7 su* doll>   
am\nt1 multipli$ by  7,b7 ! co/-(-liv+  
adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* ! taxable ye> beg9s1
 det]m9$ by sub/itut+ cal5d> ye> #bjbj =
 cal5d> ye> #bjaf 9 subp>agraph 7,a77ii7
 !re(4  ,any increase det]m9$ "u !      

prec$+ s5t5ce %all be r\nd$ to ! ne>e/  
multiple ( #ajj4  7#e7 ,age limitation  
,no cr$it %all be all[$ "u subsection   
7a7 ) respect to ! pur*ase ( any        
resid5ce unless ! taxpay] has atta9$ age
 #ah z ( ! date ( su* pur*ase4 ,9 ! case
 ( any taxpay] :o is m>ri$ 7)9 ! mean+ (
 section #ggjc71 ! taxpay] %all be      
treat$ z meet+ ! age requirem5t ( !     
prec$+ s5t5ce if ! taxpay] or !         
taxpay]'s sp\se meets su* age           
requirem5t4  7c7 ,def9itions ,= purposes
 ( ?is section-- 7#a7 ,fir/-"t homebuy] 
,! t]m fir/-"t homebuy] means any       
individual if su* individual 7& if      
m>ri$1 su* individual's sp\se7--  7,a7  
has no pres5t own]%ip int]e/ 9 any      
resid5ce dur+ ! #c-ye> p]iod end+ on !  
date ( ! pur*ase ( ! pr9cipal resid5ce  
to :i* ?is section applies1 &  7,b7 has 
n tak5 ! cr$it 9 any o!r taxable ye>4   
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 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$1
 or  7,,ii7 "u section #ajad7;a7 7relat+
 to prop]ty acquir$ f a dec$5t74  7,b7  
,con/ruction ,a resid5ce :i* is         
con/ruct$ 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 ( ! 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;b74  7d7          
,exceptions ,no cr$it "u subsection 7a7 
%all be all[$ to any taxpay] = any      
taxable ye> ) respect to ! pur*ase ( a  

resid5ce if--  7#a7 ! taxpay] disposes (
 su* resid5ce 7or su* resid5ce ceases to
 be ! pr9cipal resid5ce ( ! taxpay] 7&1 
if m>ri$1 ! taxpay]'s sp\se77 be=e !    
close ( su* taxable ye>1  7#b7 a        
d$uction "u section #aea ) respect to   
su* taxpay] is all[able to ano!r taxpay]
 = su* taxable ye>1 or  7#c7 ! taxpay]  
fails to atta* to ! return ( tax = su*  
taxable ye> a prop]ly execut$ copy ( !  
settlem5t /atem5t us$ to complete su*   
pur*ase4  7e7 ,report+ ,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;e7 %all n apply4  7f7 ,recapture 
( cr$it  7#a7 ,9 g5]al ,except z o!rwise
 provid$ 9 ?is subsection1 if1 dur+ any 
taxable ye> be=e ! close ( ! recapture  
p]iod1 a taxpay] disposes ( ! pr9cipal  
resid5ce ) respect to :i* a cr$it 0     
all[$ "u subsection 7a7 7or su* resid5ce
 ceases to be ! pr9cipal resid5ce ( !   

taxpay]71 ! tax impos$ by ?is *apt] =   
su* taxable ye> %all be increas$ by !   
recov]able am\nt det]m9$ 9 p>agraph     
7#b74  7#b7 ,recov]able am\nt ,=        
purposes ( p>agraph 7#a71 ! recov]able  
am\nt is ! product (--  7,a7 #be p]c5t (
 ! am\nt ( ! cr$it all[$ "u subsection  
7a71 multipli$ by  7,b7 ! numb] (       
taxable ye>s rema9+ 9 ! recapture p]iod 
z ( ! beg9n+ ( ! taxable ye> 9 :i* !    
taxpay] disposes ( ! pr9cipal resid5ce4 
7#c7 ,limitation bas$ on ga9 ,9 ! case (
 ! sale ( ! pr9cipal resid5ce to a p]son
 :o is n relat$ to ! taxpay]1 ! increase
 9 tax det]m9$ "u p>agraph 7#a7 %all n  
exce$ ! am\nt ( ga9 7if any7 on su*     
sale4 ,solely = purposes ( ! prec$+     
s5t5ce1 ! adju/$ basis ( su* resid5ce   
%all be r$uc$ by ! am\nt ( ! cr$it all[$
 "u subsection 7a74  7#d7 ,exceptions   
7,a7 ,dea? ( a taxpay] ,p>agraph 7#a7   
%all n apply to any taxable ye> end+    
aft] ! date ( ! taxpay]'s dea?4  7,b7   
,involunt>y ,conv]sion ,p>agraph 7#a7   
%all n apply 9 ! case ( a resid5ce :i*  

is compulsorily or involunt>ily conv]t$ 
7)9 ! mean+ ( section #ajcc7;a77 if !   
taxpay] acquires a new pr9cipal resid5ce
 dur+ ! #b-ye> p]iod beg9n+ on ! date ( 
! disposition or cessation ref]r$ to 9  
p>agraph 7#a74 ,p>agraph 7#a7 %all apply
 to su* new pr9cipal resid5ce dur+ !    
recapture p]iod 9 ! same mann] z if su* 
new pr9cipal resid5ce 7 ! conv]t$       
resid5ce4  7,c7 ,transf]s betwe5 sp\ses 
or incid5t to divorce ,9 ! case ( a     
transf] ( a resid5ce to :i* section     
#ajda7;a7 applies--  7i7 p>agraph 7#a7  
%all n apply to su* transf]1 &  7ii7 9 !
 case ( taxable ye>s end+ aft] su*      
transf]1 p>agraph 7#a7 %all apply to !  
transf]ee 9 ! same mann] z if su*       
transf]ee 7 ! transf]or 7& %all n apply 
to ! transf]or74  7,d7 ,special rule =  
memb]s ( ! arm$ =ces1 etc  7i7 ,9 g5]al 
,9 ! case ( ! disposition ( a pr9cipal  
resid5ce by an individual 7or a         
cessation ref]r$ to 9 p>agraph 7#a77    
aft] ,decemb] #ca1 #bjai1 9 connection )
 ,gov]nm5t ord]s receiv$ by su*         

individual1 or su* individual's sp\se1 =
 qualifi$ (ficial ext5d$ duty s]vice1   
p>agraph 7#a7 & subsection 7d77#b7 %all 
n apply to su* disposition 7or          
cessation74  7ii7 ,qualifi$ (ficial     
ext5d$ duty s]vice ,= purposes ( ?is    
section1 ! t]m qualifi$ (ficial ext5d$  
duty s]vice means s]vice on qualifi$    
(ficial ext5d$ duty z--  7,i7 a memb] ( 
! uni=m$ s]vices1  7,,ii7 a memb] ( !   
,=eign ,s]vice ( ! ,unit$ ,/ates1 or    
7,,iii7 an employee ( ! intellig5ce     
community4  7iii7 ,def9itions ,any t]m  
us$ 9 ?is subp>agraph :i* is also us$ 9 
p>agraph 7#i7 ( section #aba7;d7 %all h 
! same mean+ z :5 us$ 9 su* p>agraph4   
7,e7 ,disposition ( resid5ce 9          
connection ) *ange ( employm5t ,9 ! case
 ( ! disposition ( a pr9cipal resid5ce  
by an individual 7or a cessation ref]r$ 
to 9 p>agraph 7#a77 aft] ,decemb] #ca1  
#bjai 9 connection ) a *ange ( employm5t
 :i* meets ! conditions describ$ 9      
section #bag7;c71 p>agraph 7#a7 %all n  
apply to su* disposition 7or cessation74

  7#e7 ,jo9t returns ,9 ! case ( a cr$it
 all[$ "u subsection 7a7 ) respect to a 
jo9t return1 half ( su* cr$it %all be   
treat$ z hav+ be5 all[$ to ea*          
individual fil+ su* return = purposes ( 
?is subsection4  7#f7 ,return requirem5t
 ,if ! tax impos$ by ?is *apt] = !      
taxable ye> is increas$ "u ?is          
subsection1 ! taxpay] %all1 not)/&+     
section #fjab1 be requir$ to file a     
return ) respect to ! taxes impos$ "u   
?is subtitle4  7#g7 ,recapture p]iod ,= 
purposes ( ?is subsection1 ! t]m        
recapture p]iod means ! #d taxable ye>s 
beg9n+ ) ! taxable ye> 9 :i* ! pur*ase (
 ! pr9cipal resid5ce = :i* a cr$it is   
all[$ "u subsection 7a7 0 made4  7g7    
,election ,to treat pur*ase 9 prior ye> 
,9 ! case ( a pur*ase ( a pr9cipal      
resid5ce aft] ,decemb] #ca1 #bjbj1 a    
taxpay] may elect to treat su* pur*ase z
 made on ,decemb] #ca ( ! cal5d> ye>    
prec$+ su* pur*ase = purposes ( ?is     
section 7o!r ?an subsections 7b77#d71   
7c71 & 7h774  7h7 ,application ( section

 ,?is section %all only apply to a      
pr9cipal resid5ce pur*as$ by ! taxpay]  
on or aft] ,decemb] #ca1 #bjbj4  4  7b7 
,c]ta9 errors ) respect to fir/-,"t     
homebuy] tax cr$it treat$ z ma!matical  
or cl]ical errors ,p>agraph 7#b7 (      
section #fbac7;g7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by /rik+ & at !  
end ( subp>agraph 7,p71 by /rik+ ! p]iod
 at ! end ( subp>agraph 7,q7 & ins]t+ 1 
&1 & by ins]t+ aft] subp>agraph 7,q7 !  
foll[+ new subp>agraph3  7,r7 an entry  
on a return claim+ ! cr$it "u section   
#cf if--  7i7 ! ,secret>y obta9s        
in=mation f ! p]son issu+ ! ,,t9 ( !    
taxpay] t indicates t ! taxpay] does n  
meet ! age requirem5t ( section         
#cf7;b77#d71  7ii7 in=mation provid$ to 
! ,secret>y by ! taxpay] on an income   
tax return = at lea/ "o ( ! #b prec$+   
taxable ye>s is inconsi/5t ) eligibility
 = su* cr$it1 or  7iii7 ! taxpay] fails 
to atta* to ! return ! =m describ$ 9    
section #cf7;d77#c74  4  7c7 ,effective 
date ,! am5dm5ts made by ?is section    

%all apply ) respect to taxable ye>s    
beg9n+ aft] ,decemb] #ca1 #bjbj4