,i #aaith ,,congress #ast ,session ,h4 ,r4 #dceb ,,in ,,the ,,house ,,of ,,representatives ,july #aj1 #bjbe ,mrs4 ,sykes 7for herself and ,ms4 ,lee of ,pennsylvania7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to deny interest and depreciation deductions for taxpayers owning #ej or more single family properties4 #a4 ,short title ,this ,act may be cited as the ,houses ,over ,middle-,class ,exploitation ,schemes ,act or the ,,homes ,act4 #b4 ,disallowance of interest deduction for disqualified single family property owners 7a7 ,in general ,section #afc of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7n7 as subsection 7o7 and by inserting after subsection 7m7 the following new subsection3 7n7 ,interest paid by certain disqualified single family property owners 7#a7 ,in general ,in the case of a disqualified single family property owner1 no deduction shall be allowed under this chapter for any interest paid or accrued in connection with any single family residential rental property owned 7directly or indirectly7 by such disqualified single family property owner4 7#b7 ,exception 7,a7 ,in general ,paragraph 7#a7 shall not apply with respect to interest paid or accrued in the taxable year in which such single family residential rental property is sold4 7,b7 ,exception ,subparagraph 7,a7 shall not apply unless the sale described in such subparagraph is-- 7i7 a sale to an individual for use as the principle residence of the individual 7within the meaning of section #aba71 or 7ii7 a sale to any qualified nonprofit organization4 7,c7 ,qualified nonprofit organization 7i7 ,in general ,for purposes of this paragraph1 the term qualified nonprofit organization means any organization which-- 7,i7 is not organized for profit1 and 7,,ii7 has as a principal purpose the creation1 development1 or preservation of affordable housing4 7ii7 ,certain organizations included ,the term qualified nonprofit organization shall include-- 7,i7 any community development corporation 7as defined in section #bjd7;b7 of the ,department of ,veterans ,affairs and ,housing and ,urban ,development1 and ,independent ,agencies ,appropriations ,act1 #aiig 7#ab ,u4,s4,c4 #agaez-#aa;a7b7771 7,,ii7 any community housing development organization 7as defined in section #ajd of the ,cranston-,gonzales ,national ,affordable ,housing ,act 7#db ,u4,s4,c4 #abgjd771 7,,iii7 any community-based development organization qualified under section #egj4bjd of title #bd1 ,code of ,federal ,regulations1 as in effect on the date of the enactment of this subsection1 7,,iv7 any land bank1 7,v7 any resident-owned cooperative or community land trust1 and 7,,vi7 any subsidiary of a public housing agency 7as defined in section #c7;b77#f7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;a7b77#f7774 7iii7 ,land bank ,for purposes of this subparagraph1 the term land bank means a government entity1 agency1 or program1 or a special purpose nonprofit entity formed by one or more units of government in accordance with ,state or local land bank enabling law1 that has been designated by one or more ,state or local governments to acquire1 steward1 and dispose of vacant1 abandoned1 or other problem properties in accordance with locally-determined priorities and goals4 7iv7 ,community land trust ,for purposes of this subparagraph1 the term community land trust means a nonprofit organization or ,state or local government or instrumentality that-- 7,i7 use a ground lease or deed covenant with an affordability period of at least #cj years or more to-- 7aa7 make rental and homeownership units affordable to households2 and 7bb7 stipulate a preemptive option to purchase the affordable rentals or homeownership units so that the affordability of the units is preserved for successive income-eligible households2 and 7,,ii7 monitors properties to ensure affordability is preserved4 7#c7 ,disqualified single family property owner ,for purposes of this subsection-- 7,a7 ,in general ,the term disqualified single family property owner means1 with respect to any taxable year1 any taxpayer who owns 7directly or indirectly7 #ej or more single family residential rental properties4 7,b7 ,aggregation rules ,all persons treated as a single employer under subsection 7a7 or 7b7 of section #eb1 or subsection 7m7 or 7o7 of section #dad1 shall be treated as one taxpayer for purposes of this section4 7,c7 ,modifications 7i7 ,in general ,for purposes of applying subparagraph 7,b7-- 7,i7 section #eb7;a7 shall be applied by substituting component members for members1 and 7,,ii7 for purposes of applying section #eb7;b71 the term trade or business shall include any activity treated as a trade or business under paragraph 7#e7 or 7#f7 of section #dfi7;c7 7determined without regard to the phrase ,to the extent provided in regulations in such paragraph 7#f774 7ii7 ,component member ,for purposes of this paragraph1 the term component member has the meaning given such term by section #aefc7;b71 except that the determination shall be made without regard to section #aefc7;b77#b74 7iii7 ,no inference ,the modifications made by clause 7i7 shall not be construed to create any inference with respect to the proper application of section #eb with respect to any other provision of this title4 7#d7 ,single family residential rental property ,for purposes of this subsection-- 7,a7 ,in general ,the term single family residential rental property means-- 7i7 any residential rental property 7as defined in section #afh7;e77#b77;,a77i77 which contains #d or fewer dwelling units 7as defined in section #afh7;e77#b77;,a77ii77,i771 and 7ii7 improvements to real property directly related to such dwelling units located on the site of such dwelling units4 ,for purposes of clause 7i71 each townhouse or rowhouse shall be treated as a separate building4 7,b7 ,exception for certain properties ,such term shall not include any residential rental property 7as so defined7-- 7i7 with respect to which a credit is allowed under section #db for such taxable year or any property1 or 7ii7 which-- 7,i7 was constructed by the taxpayer1 or 7,,ii7 acquired by the taxpayer after its construction but before the first date on which any dwelling unit in such property was occupied by a resident4 7#e7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection1 including regulations to prevent the avoidance of the purposes of this subsection4 4 7b7 ,application to capitalized amounts 7#a7 ,in general ,section #bfc;,a7f77#b7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,d7 ,exception for certain interest of disqualified single family property owners ,subparagraph 7,a7 shall not apply to any interest for which a deduction would be disallowed under section #afc7n74 4 7#b7 ,carrying charges ,section #bff of such ,code is amended-- 7,a7 by striking ,no deduction and inserting the following3 7a7 ,in general ,no deduction 1 and 7,b7 by adding at the end the following new subsection3 7b7 ,special rule for certain interest of disqualified single family property owners ,no election may be made under this section to treat as chargeable to capital account any interest for which a deduction would be disallowed under section #afc7n74 4 7c7 ,effective date ,the amendments made by this section shall apply to indebtedness incurred in taxable years beginning after the date of the enactment of this ,act4 #c4 ,disallowance of depreciation in connection with property used by disqualified single family property owners 7a7 ,in general ,section #afg of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7i7 as subsection 7j7 and by inserting after subsection 7h7 the following new subsection3 7i7 ,deduction disallowed for disqualified single family property owners 7#a7 ,in general ,in the case of a disqualified single family property owner1 no deduction shall be allowed under this section for any single family residential rental property owned by such disqualified single family property owner4 7#b7 ,exception 7,a7 ,in general ,paragraph 7#a7 shall not apply with respect to depreciation deduction which is allowable-- 7i7 in connection with a single family residential rental property1 and 7ii7 in the taxable year in which such single family residential rental property is sold4 7,b7 ,exception ,subparagraph 7,a7 shall not apply unless the sale described in clause 7ii7 thereof is-- 7i7 a sale to an individual for use as the principle residence of the individual 7within the meaning of section #aba71 or 7ii7 a sale to any qualified nonprofit organization 7as defined in section #afc7n77#b77;,c774 7#c7 ,definitions ,for purposes of this subsection1 the terms disqualified single family property owner and single family residential rental property have the respective meanings given such terms under section #afc7n74 7#d7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection1 including regulations to prevent the avoidance of the purposes of this subsection4 4 7b7 ,effective date ,the amendments made by this section shall apply to property placed in service in taxable years beginning after the date of the enactment of this ,act4