,i  #aai? ,,congress  #b;d ,session  ,h4
 ,r4 #iegc  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,july #b1 #bjbf,mr4   
,c>ey introduc$ ! foll[+ bill2 :i* 0    
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to provide inc5tives =   
c]ta9 resid5tial r5tal prop]ty4  #a4    
,%ort title ,?is ,act may be cit$ z !   
,h\s+ ,opportunities & ,pres]vation     
,enhancem5t ,act ( #bjbf4  #b4 ,tax     
inc5tives = c]ta9 resid5tial r5tal      
prop]ty  7a7 ,9 g5]al ,*apt] #a ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by ins]t+ aft] sub*apt] ,v ! foll[+ new 
sub*apt]3  ,w ,c]ta9 resid5tial r5tal   
prop]ty  ,sec4 #adjj,w-#a4 ,qualifi$    
prop]ty4 ,sec4 #adjj,w-#b4 ,rights (    
fir/ refusal4 ,sec4 #adjj,w-#c4         
,exemption f passive activity rules4    
,sec4 #adjj,w-#d4 ,exemption f pr(it    
motive requirem5t4 ,sec4 #adjj,w-#e4    
,application ( debt allocation & at-risk
 rules4 ,sec4 #adjj,w-#f4 ,det]m9ation (
 ga9 or loss on disposition ( qualifi$  

prop]ty4 ,sec4 #adjj,w-#g4 ,accel]at$   
depreciation4 ,sec4 #adjj,w-#h4         
,exception f c]ta9 basis adju/m5t rules4
  #adjj,w-#a4 ,qualifi$ prop]ty  7a7 ,9 
g5]al ,= purposes ( ?is sub*apt]1 ! t]m 
qualifi$ prop]ty means1 ) respect to any
 taxable ye>1 any build+ :i*--  7#a7 is 
resid5tial r5tal prop]ty 7z def9$ 9     
section #afh7;e77#b77;,a771  7#b7 9 !   
case ( a qualifi$ l[-income build+ 7z   
def9$ 9 section #db7;c77#b771 is n )9 ! 
compliance p]iod 7z def9$ 9 section     
#db7;i77#a77 ) respect to su* build+1   
7#c7 is own$ by a p>tn]%ip :i* is a     
limit$ liability company or a limit$    
p>tn]%ip 9 :i* e manag+ memb] or g5]al  
p>tn] is a qualifi$ tax-exempt          
organization1 a ,/ate or local gov]nm5t1
 a qualifi$ tribal h\s+ ag5cy1 or a     
public h\s+ au?ority1  7#d7 z ( ! close 
( su* taxable ye>1 at lea/ #gj p]c5t ( !
 resid5tial units 9 su* build+ are bo?  
r5t-re/rict$ 7)9 ! mean+ ( section      
#db7;g77#b77 & occupi$ by individuals ^:
 income is #hj p]c5t or less ( ! area   

m$ian income 7det]m9$ "u ! rules (      
section #db71  7#e7 z ( ! close ( su*   
taxable ye>1 su* build+ b\nd by         
re/rictions en=c+ p>agraph 7#d7 :i*     
o!rwise meet ! requirem5ts ( clauses    
7ii7 ?r\gh 7vi7 ( section               
#db7;h77#f77;,b71  7#f7 dur+ any        
#bd-mon? p]iod1 rehabilitation          
exp5ditures 7z def9$ 9 section          
#db7;e77#b77 ) respect to su* build+    
paid or incurr$ by su* p>tn]%ip equal or
 exce$ ! great] (--  7,a7 #bj p]c5t ( ! 
adju/$ basis ( su* build+ 7z ( ! beg9n+ 
( su* p]iod71 or  7,b7 #bj1jjj p]       
resid5tial unit1 &  7#g7 0 orig9ally    
plac$ 9 s]vice m ?an #ae ye>s be=e !    
date on ! :i* ! rehabilitation ref]r$ to
 9 p>agraph 7#f7 began4  7b7            
,v]ification ( rehabilitation           
exp5ditures  ,! requirem5t ( subsection 
7a77#f7 %all n be treat$ z satisfi$     
unless an indep5d5t attorney or c]tifi$ 
public acc\ntant has issu$ a writt5     
c]tification t su* attorney or acc\ntant
 has exam9$ ! exp5ditures incurr$ )     

respect to su* build+ &1 bas$ ^u su*    
exam9ation1 x is su* attorney's or      
acc\ntant's belief t su* requirem5t has 
be5 satisfi$4  7c7  ,def9itions  ,=     
purposes ( ?is section-- 7#a7 ,public   
h\s+ au?ority ,! t]m public h\s+        
au?ority means any ,/ate1 c\nty1        
municipality1 or o!r gov]nm5tal entity  
or public body1 or ag5cy or             
in/rum5tality ( ! =ego+1 t is au?oriz$  
to engage or assi/ 9 ! developm5t or    
op]ation ( l[-income h\s+ "u ! ,unit$   
,/ates ,h\s+ ,act ( #aicg4  7#b7        
,qualifi$ tax-exempt organization  7,a7 
,9 g5]al  ,! t]m qualifi$ tax-exempt    
organization means1 ) respect to any    
qualifi$ prop]ty1 any organization      
exempt f ! tax impos$ "u ?is *apt] t1 = 
! #e ye>s prec$+ ! date on :i* su*      
qualifi$ prop]ty 0 plac$ 9 s]vice--  7i7
 met ! requirem5ts ( section            
#db7;h77#e77;,c77i7 & 7ii71  7ii7 _h an 
own]%ip int]e/ 9 resid5tial r5tal       
prop]ty s]v+ l[-income p]sons1 &  7iii7 
mat]ially p>ticipat$ 7)9 ! mean+ (      

section #dfi7;h77 9 ! developm5t &      
op]ation ( resid5tial r5tal prop]ty4    
7,b7  ,application ( requirem5ts to ti]$
 organizations  ,= purposes ( ?is       
p>agraph1 an organization %all be treat$
 z satisfy+ ! requirem5ts ( clause 7ii7 
or 7iii7 ( subp>agraph 7,a7 if--  7i7   
any organization 9 :i* su* organization 
holds /ock satisfies su* requirem5ts1 or
  7ii7 all ( ! /ock ( su* organization  
is held by #a or m tax-exempt           
organizations at all times dur+ ! p]iod 
su* organization is 9 exi/5ce & su*     
organizations satisfy su* requirem5ts4  
7#c7  ,qualifi$ tribal h\s+ au?ority  ,!
 t]m qualifi$ tribal h\s+ au?ority      
means1 ) respect to any qualifi$        
prop]ty1 any organization t1 = ! #e ye>s
 prec$+ ! date on :i* su* qualifi$      
prop]ty 0 plac$ 9 s]vice--  7,a7 is     
designat$ by an ,indian tribal gov]nm5t 
7z def9$ 9 section #ggja7;a77#dj77 to   
engage or assi/ 9 ! developm5t &        
op]ation ( l[-income h\s+1 &  7,b7 _h an
 own]%ip int]e/ 9 resid5tial r5tal      

prop]ty s]v+ l[-income p]sons1 &        
mat]ially p>ticipat$ 7)9 ! mean+ (      
section #dfi7;h77 9 ! developm5t &      
op]ation ( resid5tial r5tal prop]ty4    
7d7  ,inflation adju/m5t  ,9 ! case ( a 
#bd-mon? p]iod ref]r$ to 9 subsection   
7a77#f7 :i* ends 9 a cal5d> ye> aft]    
#bjbf1 ! #bj1jjj am\nt 9 su* subp>agraph
 %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 = su* cal5d> ye> by  
sub/itut+ cal5d> ye> #bjbe = cal5d> ye> 
#bjaf 9 subp>agraph 7,a77ii7 !re(4  ,any
 increase "u ! prec$+ s5t5ce :i* is n a 
multiple ( #ajj %all be r\nd$ to ! ne>e/
 multiple ( #ajj4  #adjj,w-#b4  ,rights 
( fir/ refusal  7a7  ,9 g5]al  ,no      
,f$]al income tax b5efit %all fail to be
 all[able to ! taxpay] ) respect to any 
qualifi$ prop]ty1 m]ely by reason ( a "r
 ( fir/ refusal or pur*ase option held  
by a gov]nm5t ag5cy or an organization  
describ$ 9 p>agraph 7#c7 or 7#d7 (      
section #eja7;c7 & exempt f tax "u      

section #eja7;a7 to pur*ase su* prop]ty 
or all ( ! p>tn]%ip int]e/s 7o!r ?an    
int]e/s ( ! p]son ex]cis+ su* option or 
a relat$ p>ty !reto 7)9 ! mean+ (       
section #bfg7;b7 or #gjg7;b77#a7771 aft]
 ! close ( ! #aj? ye> aft] ! acquisition
 ( ! qualifi$ prop]ty = a price :i* is n
 less ?an ! m9imum pur*ase price4  7b7  
,m9imum pur*ase price  ,= purposes ( ?is
 section1 ! t]m m9imum pur*ase price    
means1 ) respect to any qualifi$        
prop]ty1 ! sum (--  7#a7 ! pr9cipal     
am\nt ( out/&+ indebt$ness secur$ by su*
 prop]ty 7o!r ?an indebt$ness incurr$ )9
 ! #e-ye> p]iod end+ on ! date ( !      
sale71 &  7#b7 all ,f$]al1 ,/ate1 &     
local taxes attributable to su* sale4   
7c7  ,special rules  ,= purposes (      
det]m9+ :e!r an option1 includ+ a "r (  
fir/ refusal1 to pur*ase prop]ty is     
describ$ 9 ?is section--  7#a7 su*      
option or "r ( fir/ refusal may be      
ex]cis$ ) or )\t ! approval ( ! taxpay]1
 or any limit$ p>tn] 9 a limit$ p>tn]%ip
 or manag] or manag+ memb] ( a limit$   

liability company1 &  7#b7 a "r ( fir/  
refusal may be ex]cis$ 9 response to any
 (f] to pur*ase ! prop]ty1 includ+ an   
(f] by a relat$ p>ty4  #adjj,w-#c4      
,exemption f passive activity rules  ,= 
purposes ( section #dfi1 ! t]m passive  
activity %all n include ! resid5tial    
r5tal ( qualifi$ prop]ty4  #adjj,w-#d4  
,exemption f pr(it motive requirem5t    
,section #ahc7;a7 %all n apply to !     
resid5tial r5tal ( qualifi$ prop]ty4    
#adjj,w-#e4  ,application ( debt        
allocation & at-risk rules  7a7  ,9     
g5]al  ,= purposes ( sections #geb &    
#dfe1 ! t]m qualifi$ nonrec\rse f9anc+  
includes any f9anc+--  7#a7 :i* is      
borr[$ by a p>tn]%ip ref]r$ to 9 section
 #adjj,w-#a7;a77#c7 ) respect to !      
activity ( hold+ qualifi$ prop]ty1 &    
7#b7 :i* is borr[$ by ! p>tn]%ip f an   
organization exempt f tax "u ?is *apt]1 
includ+ any su* organization t is a     
p>tn] 9 ! p>tn]%ip4  7b7  ,det]m9ation (
 p>tn]'s %>e ( qualifi$ nonrec\rse      
f9anc+  ,a p>tn]'s %>e ( any qualifi$   

nonrec\rse f9anc+ ( su* p>tn]%ip %all be
 det]m9$ on ! basis ( ! p>tn]'s %>e (   
liabilities ( su* p>tn]%ip incurr$ 9    
connection ) su* f9anc+ 7)9 ! mean+ (   
section #geb74  7c7  ,risk ( loss  ,= ! 
purposes ( section #geb & subsection    
7b71 a p>tn] %all be deem$ to n be> !   
risk ( loss = a loan made 7or made by a 
relat$ p]son to su* p>tn]7 ) respect to 
qualifi$ prop]ty t is qualifi$          
nonrec\rse f9anc+ describ$ 9 subsection 
7a74  #adjj,w-#f4  ,det]m9ation ( ga9 or
 loss on disposition ( qualifi$ prop]ty 
,= purposes ( det]m9+ ! ga9 or loss on !
 sale or ex*ange ( any qualifi$ prop]ty 
7or any pass-?r\gh int]e/ !re97 held by 
! taxpay] = n less ?an #aj ye>s beg9n+  
on ! date t su* qualifi$ prop]ty 0 plac$
 9 s]vice1 ! basis ( su* prop]ty or     
pass-?r\gh int]e/ %all be equal to !    
fair m>ket value ( su* prop]ty on ! date
 ( su* sale or ex*ange4  #adjj,w-#g4    
,accel]at$ depreciation  ,9 ! case (    
qualifi$ prop]ty 7& any prop]ty int5d$  
to become qualifi$ prop]ty )9 #bd       

mon?s71 ! recov]y p]iod ( su* prop]ty = 
purposes ( section #afh 7includ+        
subsection 7g77#b7 !re(7 %all be #ae    
ye>s4  #adjj,w-#h4  ,exception f c]ta9  
basis adju/m5t rules  7a7  ,no basis    
adju/m5t = en]gy effici5t home cr$it    
,section #de,l7e7 %all n apply to       
qualifi$ prop]ty4  7b7  ,no basis       
adju/m5t = en]gy effici5t comm]cial     
build+ d$uction  ,section #agi;,d7e7    
%all n apply to qualifi$ prop]ty4  7c7  
,no basis adju/m5t = inve/m5t cr$its    
,section #ej7;c7 %all n apply to        
qualifi$ prop]ty4  #adjj,w-#i4          
,treatm5t ( cpaital grants  ,9 ! case ( 
any am\nt receiv$ by an entity describ$ 
9 #adjj,w-#a7;c7 ) respect to prop]ty   
int5d$ to be qualifi$ prop]ty1 z def9$ 9
 section #dfj7;c77#h71 su*              
consid]ation--  7#a7 %all n be          
includible 9 gross income ( ! eligible  
taxpay]1 &  7#b7 ! depreciable basis (  
any prop]ty acquir$ ) su* money %all n  
be r$uc$ by ! am\nt ( su* consid]ation4 
4  7b7 ,cl]ical am5dm5t ,! table (      

sub*apt]s = *apt] #a ( ! ,int]nal       
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 aft] ! item relat+ to sub*apt] ,v !    
foll[+ new item3  ,sub*apt] ,w--,c]ta9  
resid5tial r5tal prop]ty  4  7c7        
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] ! date ( ! enactm5t ( ?is   
,act4