,,ii #aaith ,,congress #ast ,session ,s4 #bdjb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #bc1 #bjbe,mr4 ,whitehouse 7for himself1 ,mr4 ,heinrich1 ,mr4 ,welch1 ,ms4 ,smith1 ,mr4 ,reed1 ,ms4 ,baldwin1 ,ms4 ,rosen1 ,mr4 ,blumenthal1 ,mr4 ,van ,hollen1 ,ms4 ,blunt ,rochester1 ,mr4 ,kim1 ,mr4 ,gallego1 and ,ms4 ,alsobrooks7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide for a first-time homebuyer credit1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,first-,time ,homebuyer ,tax ,credit ,act of #bjbe4 #b4 ,first-time homebuyer refundable tax credit 7a7 ,in general ,section #cf of the ,internal ,revenue ,code of #aihf is amended to read as follows3 #cf4 ,first-time homebuyer credit 7a7 ,allowance of credit ,in the case of an individual who is a first-time homebuyer of a principal residence in the ,united ,states during a taxable year1 there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to #aj percent of the purchase price of the residence4 7b7 ,limitations 7#a7 ,dollar limitation 7,a7 ,in general ,except as otherwise provided in this paragraph1 the credit allowed under subsection 7a7 shall not exceed #ae1jjj4 7,b7 ,married individuals filing separately ,in the case of a married individual filing a separate return1 subparagraph 7,a7 shall be applied by substituting #g1ejj for #ae1jjj4 7,c7 ,other individuals ,if #b or more individuals who are not married purchase a principal residence1 the amount of the credit allowed under subsection 7a7 shall be allocated among such individuals in such manner as the ,secretary may prescribe1 except that the total amount of the credits allowed to all such individuals shall not exceed #ae1jjj4 7#b7 ,phaseout based on area median income 7,a7 ,in general ,the amount allowable as a credit under subsection 7a7 7determined without regard to this paragraph7 shall be reduced 7but not below zero7 by the amount which bears the same ratio to the amount which is so allowable as-- 7i7 the excess 7if any7 of-- 7,i7 the modified adjusted gross income of the taxpayer for the taxable year1 over 7,,ii7 #aej percent of the applicable ,area ,medium ,income1 bears to 7ii7 #bj percent of the applicable ,area ,median ,income4 7,b7 ,modified adjusted gross income ,for purposes of subparagraph 7,a71 the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section #iaa1 #ica1 or #icc4 7,c7 ,applicable ,area ,median ,income ,for purposes of subparagraph 7,a71 the term applicable ,area ,median ,income means the ,area ,median ,income set by the ,secretary of ,housing and ,urban ,development with respect to-- 7i7 the area in which the principal residence is located1 7ii7 the size of the household of the taxpayer1 and 7iii7 the calendar year in which the principal residence is purchased4 7,d7 ,regulations and guidance ,the ,secretary1 after consultation with the ,secretary of ,housing and ,urban ,development1 shall issue such regulations and guidance as are necessary to carry out the purposes of this subparagraph4 7#c7 ,limitation based on area median purchase price 7,a7 ,in general ,the amount allowable as a credit under subsection 7a7 7determined without regard to this paragraph7 shall be reduced 7but not below zero7 by the amount which bears the same ratio to the amount which is so allowable as-- 7i7 the excess 7if any7 of-- 7,i7 the purchase price of the principal residence1 over 7,,ii7 the amount which is equal to #aaj percent of the area median purchase price1 bears to 7ii7 the amount which is equal to #ae percent of the area median purchase price4 7,b7 ,area median purchase price ,for purposes of this paragraph1 the term area median purchase price means the median purchase price for a home in both the area and the calendar year in which the purchase of the principal residence takes place4 7,c7 ,regulations and guidance ,the ,secretary1 after consultation with the ,secretary of ,housing and ,urban ,development1 shall promulgate such regulations and guidance as are necessary to carry out the purposes of this subparagraph1 including for determining the area median purchase price with respect to different localities4 7#d7 ,inflation adjustment ,in the case of any taxable year beginning in a calendar year after #bjbe1 each of the dollar amounts in paragraph 7#a7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbd for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the nearest multiple of #ajj4 7#e7 ,age limitation ,no credit shall be allowed under subsection 7a7 with respect to the purchase of any residence unless the taxpayer has attained age #ah as of the date of such purchase4 ,in the case of any taxpayer who is married 7within the meaning of section #ggjc71 the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer's spouse meets such age requirement4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,first-time homebuyer ,the term first-time homebuyer means any individual if such individual 7and if married1 such individual's spouse7-- 7,a7 has no present ownership interest in any residence during the #c-year period ending on the date of the purchase of the principal residence to which this section applies1 and 7,b7 has not taken the credit under this section in any other taxable year4 7#b7 ,principal residence ,the term principal residence has the same meaning as when used in section #aba4 7#c7 ,purchase 7,a7 ,in general ,the term purchase means any acquisition1 but only if-- 7i7 the property is not acquired from a person related to the person acquiring such property 7or1 if married1 such individual's spouse71 7ii7 the acquisition is financed through a federally backed mortgage loan 7as defined in section #djbb of the ,,cares ,act71 and 7iii7 the basis of the property in the hands of the person acquiring such property is not determined-- 7,i7 in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired1 or 7,,ii7 under section #ajad7;a7 7relating to property acquired from a decedent74 7,b7 ,construction ,a residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence4 7#d7 ,purchase price ,the term purchase price means the adjusted basis of the principal residence on the date such residence is purchased4 7#e7 ,related persons ,a person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section #bfg or #gjg7;b74 7d7 ,exceptions ,no credit under subsection 7a7 shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if-- 7#a7 the taxpayer disposes of such residence 7or such residence ceases to be the principal residence of the taxpayer 7and1 if married1 the taxpayer's spouse77 before the close of such taxable year1 7#b7 a deduction under section #aea with respect to such taxpayer is allowable to another taxpayer for such taxable year1 or 7#c7 the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase4 7e7 ,reporting ,if the ,secretary requires information reporting under section #fjde by a person described in subsection 7e77#b7 thereof to verify the eligibility of taxpayers for the credit allowable by this section1 the exception provided by section #fjde7;e77#e7 shall not apply4 7f7 ,recapture of credit 7#a7 ,in general ,except as otherwise provided in this subsection1 if1 during any taxable year before the close of the recapture period1 a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection 7a7 7or such residence ceases to be the principal residence of the taxpayer71 the tax imposed by this chapter for such taxable year shall be increased by the recoverable amount determined in paragraph 7#b74 7#b7 ,recoverable amount ,for purposes of paragraph 7#a71 the recoverable amount is the product of-- 7,a7 #be percent of the amount of the credit allowed under subsection 7a71 multiplied by 7,b7 the number of taxable years remaining in the recapture period as of the beginning of the taxable year in which the taxpayer disposes of the principal residence4 7#c7 ,limitation based on gain ,in the case of the sale of the principal residence to a person who is not related to the taxpayer1 the increase in tax determined under paragraph 7#a7 shall not exceed the amount of gain 7if any7 on such sale4 ,solely for purposes of the preceding sentence1 the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection 7a74 7#d7 ,exceptions 7,a7 ,death of a taxpayer ,paragraph 7#a7 shall not apply to any taxable year ending after the date of the taxpayer's death4 7,b7 ,involuntary conversion ,paragraph 7#a7 shall not apply in the case of a residence which is compulsorily or involuntarily converted 7within the meaning of section #ajcc7;a77 if the taxpayer acquires a new principal residence during the #b-year period beginning on the date of the disposition or cessation referred to in paragraph 7#a74 ,paragraph 7#a7 shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence4 7,c7 ,transfers between spouses or incident to divorce ,in the case of a transfer of a residence to which section #ajda7;a7 applies-- 7i7 paragraph 7#a7 shall not apply to such transfer1 and 7ii7 in the case of taxable years ending after such transfer1 paragraph 7#a7 shall apply to the transferee in the same manner as if such transferee were the transferor 7and shall not apply to the transferor74 7,d7 ,special rule for members of the ,armed ,forces1 etc 7i7 ,in general ,in the case of the disposition of a principal residence by an individual 7or a cessation referred to in paragraph 7#a77 after ,december #ca1 #bjbb1 in connection with ,government orders received by such individual1 or such individual's spouse1 for qualified official extended duty service1 paragraph 7#a7 and subsection 7d77#b7 shall not apply to such disposition 7or cessation74 7ii7 ,qualified official extended duty service ,for purposes of this section1 the term qualified official extended duty service means service on qualified official extended duty as-- 7,i7 a member of the uniformed services1 7,,ii7 a member of the ,foreign ,service of the ,united ,states1 or 7,,iii7 an employee of the intelligence community4 7iii7 ,definitions ,any term used in this subparagraph which is also used in paragraph 7#i7 of section #aba7;d7 shall have the same meaning as when used in such paragraph4 7,e7 ,disposition of residence in connection with change of employment ,in the case of the disposition of a principal residence by an individual 7or a cessation referred to in paragraph 7#a77 after ,december #ca1 #bjbb1 in connection with a change of employment which meets the conditions described in section #bag7;c71 paragraph 7#a7 shall not apply to such disposition 7or cessation74 7#e7 ,joint returns ,in the case of a credit allowed under subsection 7a7 with respect to a joint return1 half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection4 7#f7 ,return requirement ,if the tax imposed by this chapter for the taxable year is increased under this subsection1 the taxpayer shall1 notwithstanding section #fjab1 be required to file a return with respect to the taxes imposed under this subtitle4 7#g7 ,recapture period ,for purposes of this subsection1 the term recapture period means the #d taxable years beginning with the taxable year in which the purchase of the principal residence for which a credit is allowed under subsection 7a7 was made4 7g7 ,election ,to treat purchase in prior year ,in the case of a purchase of a principal residence after ,december #ca1 #bjbc1 a taxpayer may elect to treat such purchase as made on ,december #ca of the calendar year preceding such purchase for purposes of this section 7other than subsections 7b77#d71 7c71 and 7h774 7h7 ,transfer of credit 7#a7 ,in general ,subject to such regulations and other guidance as the ,secretary determines necessary1 a taxpayer may elect that the credit which would 7but for this subsection7 be allowed to such taxpayer with respect to the purchase of a principal residence shall be allowed to the mortgage lender with respect to such purchase and not to such taxpayer4 7#b7 ,eligible entity ,for purposes of this subsection1 the term eligible entity means1 with respect to the purchase of the principal residence for which the credit is allowed under subsection 7a71 the mortgage lender which provides the mortgage to the taxpayer and has-- 7,a7 registered with the ,secretary for purposes of this paragraph1 at such time1 and in such form and manner1 as the ,secretary may prescribe1 7,b7 prior to the election described in paragraph 7#a7 and not later than at the time of such purchase1 disclosed to the taxpayer making such purchase-- 7i7 the value of the credit allowed under subsection 7a71 and 7ii7 the amount provided by the mortgage lender to such taxpayer as a condition of the election described in paragraph 7#a74 7,c7 not later than at the time of such purchase1 made payment to such taxpayer 7whether in cash or in the form of a partial payment or down payment for the purchase of such principal residence7 in an amount equal to the credit otherwise allowable to such taxpayer1 and 7,d7 with respect to any incentive otherwise available for taking a mortgage for which a credit is allowed under this section1 including any incentive in the form of a rebate or discount provided by the mortgage lender1 ensured that-- 7i7 the availability or use of such incentive shall not limit the ability of a taxpayer to make an election described in paragraph 7#a71 and 7ii7 such election shall not limit the value or use of such incentive4 7#c7 ,timing ,an election described in paragraph 7#a7 shall be made by the taxpayer not later than the date on which the purchase of the principal residence with respect to which the credit under subsection 7a7 is allowed is made4 7#d7 ,revocation of registration ,upon determination by the ,secretary that a mortgage lender has failed to comply with the requirements described in paragraph 7#b71 the ,secretary may revoke the registration 7as described in subparagraph 7,a7 of such paragraph7 of such mortgage lender4 7#e7 ,tax treatment of payments ,with respect to any payment described in paragraph 7#b77;,c71 such payment-- 7,a7 shall not be includible in the gross income of the taxpayer1 and 7,b7 with respect to the mortgage lender1 shall not be deductible under this title4 7#f7 ,advance payment to mortgage lenders 7,a7 ,in general ,the ,secretary shall establish a program to make advance payments to any eligible entity in an amount equal to the cumulative amount of the credits allowed under subsection 7a7 with respect to any mortgages issued by such entity for which an election described in paragraph 7#a7 has been made4 7,b7 ,excessive payments ,rules similar to the rules of section #fdag7;d77#f7 shall apply for purposes of this paragraph4 7,c7 ,treatment of advance payments ,for purposes of section #acbd of title #ca1 ,united ,states ,code1 the payments under subparagraph 7,a7 shall be treated in the same manner as a refund due from a credit provision referred to in subsection 7b77#b7 of such section4 7#g7 ,recapture ,in the case of any taxpayer who has made an election described in paragraph 7#a7 with respect to the purchase of a principal residence and received a payment described in paragraph 7#b77;,c7 from an eligible entity1 such principal residence shall be treated as a principal residence with respect to which a credit was allowed under subsection 7a7 for purposes of subsection 7f74 4 7b7 ,certain errors with respect to first-,time homebuyer tax credit treated as mathematical or clerical errors ,paragraph 7#b7 of section #fbac7;g7 of the ,internal ,revenue ,code of #aihf1 as amended by ,public ,law #aai-ba1 is amended by striking and at the end of subparagraph 7,z71 by striking the period at the end of subparagraph 7,,aa7 and inserting 1 and1 and by inserting after subparagraph 7,,aa7 the following new subparagraph3 7,,bb7 an entry on a return claiming the credit under section #cf if-- 7i7 the ,secretary obtains information from the person issuing the ,,tin of the taxpayer that indicates that the taxpayer does not meet the age requirement of section #cf7;b77#d71 7ii7 information provided to the ,secretary by the taxpayer on an income tax return for at least one of the #b preceding taxable years is inconsistent with eligibility for such credit1 or 7iii7 the taxpayer fails to attach to the return the form described in section #cf7;d77#c74 4 7c7 ,effective date ,the amendments made by this section shall apply with respect to principal residences purchased after the date of the enactment of this ,act4