,,ii  #aai? ,,congress  #a/ ,session    
,s4 #ifi  ,,9 ,,! ,,s5ate ,,( ,,!       
,,unit$ ,,/ates  ,m>* #aa 7legislative  
day1 ,m>* #aj71 #bjbe,mr4 ,w>nock 7=    
himself1 ,ms4 ,smi?1 ,mr4 ,wyd51 ,ms4   
,baldw91 ,ms4 ,w>r51 ,mr4 ,gallego1 ,mr4
 ,re$1 ,mr4 ,s&]s1 ,ms4 ,klobu*>1 ,mr4  
,wel*1 ,mr4 ,blum5?al1 & ,mr4 ,book]7   
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to d5y int]e/ &   
depreciation d$uctions = taxpay]s own+  
#ej or m s+le family prop]ties4  #a4    
,%ort title ,?is ,act may be cit$ z !   
,/op ,pr$atory ,inve/+ ,act4  #b4       
,disall[ance ( int]e/ d$uction =        
disqualifi$ s+le family prop]ty own]s   
7a7 ,9 g5]al ,section #afc ( ! ,int]nal 
,rev5ue ,code ( #aihf is am5d$ by       
r$esignat+ subsection 7n7 z subsection  
7o7 & by ins]t+ aft] subsection 7m7 !   
foll[+ new subsection3  7n7 ,int]e/ paid
 by c]ta9 disqualifi$ s+le family       
prop]ty own]s  7#a7 ,9 g5]al ,9 ! case (

 a disqualifi$ s+le family prop]ty own]1
 no d$uction %all be all[$ "u ?is *apt] 
= any int]e/ paid or accru$ 9 connection
 ) any s+le family resid5tial r5tal     
prop]ty own$ 7directly or indirectly7 by
 su* disqualifi$ s+le family prop]ty    
own]4  7#b7 ,exception  7,a7 ,9 g5]al   
,p>agraph 7#a7 %all n apply ) respect to
 int]e/ paid or accru$ 9 ! taxable ye> 9
 :i* su* s+le family resid5tial r5tal   
prop]ty is sold4  7,b7 ,exception       
,subp>agraph 7,a7 %all n apply unless ! 
sale describ$ 9 su* subp>agraph is-- 7i7
 a sale to an individual = use z !      
pr9ciple resid5ce ( ! individual 7)9 !  
mean+ ( section #aba71 or  7ii7 a sale  
to any qualifi$ nonpr(it organization4  
7,c7 ,qualifi$ nonpr(it organization    
7i7 ,9 g5]al ,= purposes ( ?is p>agraph1
 ! t]m qualifi$ nonpr(it organization   
means any organization :i*-- 7,i7 is n  
organiz$ = pr(it1 &  7,,ii7 has z a     
pr9cipal purpose ! creation1 developm5t1
 or pres]vation ( af=dable h\s+4  7ii7  
,c]ta9 organizations includ$ ,! t]m     

qualifi$ nonpr(it organization %all     
include-- 7,i7 any community developm5t 
corporation 7z def9$ 9 section #bjd7;b7 
( ! ,dep>tm5t ( ,vet]ans ,affairs &     
,h\s+ & ,urban ,developm5t1 & ,indep5d5t
 ,ag5cies ,appropriations ,act1 #aiig   
7#ab ,u4,s4,c4 #agaez-#aa;a7b771  7,,ii7
 any community h\s+ developm5t          
organization 7z def9$ 9 section #ajd ( !
 ,cran/on-,gonzales ,national ,af=dable 
,h\s+ ,act 7#db ,u4,s4,c4 #abgjd71      
7,,iii7 any community-bas$ developm5t   
organization qualifi$ "u section        
#egj4bjd ( title #bd1 ,code ( ,f$]al    
,regulations1 z 9 effect on ! date ( !  
enactm5t ( ?is subsection1  7,,iv7 any  
l& bank1  7,v7 any resid5t-own$         
coop]ative or community l& tru/1 &      
7,,vi7 any subsidi>y ( a public h\s+    
ag5cy 7z def9$ 9 section #c7;b77#f7 ( ! 
,unit$ ,/ates ,h\s+ ,act ( #aicg 7#db   
,u4,s4,c4 #adcg;a7b77#f774  7iii7 ,l&   
bank ,= purposes ( ?is subp>agraph1 !   
t]m l& bank means a gov]nm5t entity1    
ag5cy1 or program1 or a special purpose 

nonpr(it entity =m$ by "o or m units (  
gov]nm5t 9 accordance ) ,/ate or local  
l& bank enabl+ law1 t has be5 designat$ 
by "o or m ,/ate or local gov]nm5ts to  
acquire1 /ew>d1 & dispose ( vacant1     
ab&on$1 or o!r problem prop]ties 9      
accordance ) locally-det]m9$ priorities 
& goals4  7iv7 ,community l& tru/ ,=    
purposes ( ?is subp>agraph1 ! t]m       
community l& tru/ means a nonpr(it      
organization or ,/ate or local gov]nm5t 
or in/rum5tality t-- 7,i7 use a gr\nd   
lease or de$ cov5ant ) an af=dability   
p]iod ( at lea/ #cj ye>s or m to-- 7aa7 
make r5tal & home[n]%ip units af=dable  
to h\seholds2 &  7bb7 /ipulate a        
preemptive option to pur*ase ! af=dable 
r5tals or home[n]%ip units s t !        
af=dability ( ! units is pres]v$ =      
successive income-eligible h\seholds2 & 
7,,ii7 monitors prop]ties to ensure     
af=dability is pres]v$4  7#c7           
,disqualifi$ s+le family prop]ty own] ,=
 purposes ( ?is subsection-- 7,a7 ,9    
g5]al ,! t]m disqualifi$ s+le family    

prop]ty own] means1 ) respect to any    
taxable ye>1 any taxpay] :o owns        
7directly or indirectly7 #ej or m s+le  
family resid5tial r5tal prop]ties4  7,b7
 ,aggregation rules ,all p]sons treat$ z
 a s+le employ] "u subsection 7a7 or 7b7
 ( section #eb1 or subsection 7m7 or 7o7
 ( section #dad1 %all be treat$ z "o    
taxpay] = purposes ( ?is section4  7,c7 
,modifications  7i7 ,9 g5]al ,= purposes
 ( apply+ subp>agraph 7,b7-- 7,i7       
section #eb7;a7 %all be appli$ by       
sub/itut+ compon5t memb]s = memb]s1 &   
7,,ii7 = purposes ( apply+ section      
#eb7;b71 ! t]m trade or bus9ess %all    
include any activity treat$ z a trade or
 bus9ess "u p>agraph 7#e7 or 7#f7 (     
section #dfi7;c7 7det]m9$ )\t reg>d to !
 phrase ,to ! ext5t provid$ 9           
regulations 9 su* p>agraph 7#f774  7ii7 
,compon5t memb] ,= purposes ( ?is       
p>agraph1 ! t]m compon5t memb] has !    
mean+ giv5 su* t]m by section #aefc7;b71
 except t ! det]m9ation %all be made )\t
 reg>d to section #aefc7;b77#b74  7iii7 

,no inf]5ce ,! modifications made by    
clause 7i7 %all n be con/ru$ to create  
any inf]5ce ) respect to ! prop]        
application ( section #eb ) respect to  
any o!r provision ( ?is title4  7#d7    
,s+le family resid5tial r5tal prop]ty ,=
 purposes ( ?is subsection-- 7,a7 ,9    
g5]al ,! t]m s+le family resid5tial     
r5tal prop]ty means-- 7i7 any resid5tial
 r5tal prop]ty 7z def9$ 9 section       
#afh7;e77#b77;,a77i77 :i* conta9s #d or 
few] dwell+ units 7z def9$ 9 section    
#afh7;e77#b77;,a77ii77,i771 &  7ii7     
improvem5ts to real prop]ty directly    
relat$ to su* dwell+ units locat$ on !  
site ( su* dwell+ units4  ,= purposes ( 
clause 7i71 ea* t[nh\se or r[h\se %all  
be treat$ z a sep>ate build+4  7,b7     
,exception = c]ta9 prop]ties ,su* t]m   
%all n include any resid5tial r5tal     
prop]ty 7z s def9$7-- 7i7 ) respect to  
:i* a cr$it is all[$ "u section #db =   
su* taxable ye> or any prop]ty1 or  7ii7
 :i*-- 7,i7 0 con/ruct$ by ! taxpay]1 or
  7,,ii7 acquir$ by ! taxpay] aft] its  

con/ruction b be=e ! fir/ date on :i*   
any dwell+ unit 9 su* prop]ty 0 occupi$ 
by a resid5t4  7#e7 ,regulations ,!     
,secret>y %all prescribe su* regulations
 z may be necess>y or appropriate to    
c>ry out ! purposes ( ?is subsection1   
includ+ regulations to prev5t !         
avoidance ( ! purposes ( ?is subsection4
  4  7b7 ,application to capitaliz$     
am\nts  7#a7 ,9 g5]al ,section          
#bfc;,a7f77#b7 ( ! ,int]nal ,rev5ue     
,code ( #aihf is am5d$ by add+ at ! end 
! foll[+ new subp>agraph3  7,d7         
,exception = c]ta9 int]e/ ( disqualifi$ 
s+le family prop]ty own]s ,subp>agraph  
7,a7 %all n apply to any int]e/ = :i* a 
d$uction w\ld be disall[$ "u section    
#afc7n74  4  7#b7 ,c>ry+ *>ges ,section 
#bff ( su* ,code is am5d$-- 7,a7 by     
/rik+ ,no d$uction & ins]t+ ! foll[+3   
7a7 ,9 g5]al ,no d$uction  1 &  7,b7 by 
add+ at ! end ! foll[+ new subsection3  
7b7 ,special rule = c]ta9 int]e/ (      
disqualifi$ s+le family prop]ty own]s   
,no election may be made "u ?is section 

to treat z *>geable to capital acc\nt   
any int]e/ = :i* a d$uction w\ld be     
disall[$ "u section #afc7n74  4  7c7    
,effective date ,! am5dm5ts made by ?is 
section %all apply to indebt$ness       
incurr$ 9 taxable ye>s beg9n+ aft] !    
date ( ! enactm5t ( ?is ,act4  #c4      
,disall[ance ( depreciation 9 connection
 ) prop]ty us$ by disqualifi$ s+le      
family prop]ty own]s  7a7 ,9 g5]al      
,section #afg ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by r$esignat+         
subsection 7i7 z subsection 7j7 & by    
ins]t+ aft] subsection 7h7 ! foll[+ new 
subsection3  7i7 ,d$uction disall[$ =   
disqualifi$ s+le family prop]ty own]s   
7#a7 ,9 g5]al ,9 ! case ( a disqualifi$ 
s+le family prop]ty own]1 no d$uction   
%all be all[$ "u ?is section = any s+le 
family resid5tial r5tal prop]ty own$ by 
su* disqualifi$ s+le family prop]ty     
own]4  7#b7 ,exception  7,a7 ,9 g5]al   
,p>agraph 7#a7 %all n apply ) respect to
 depreciation d$uction :i* is all[able--
 7i7 9 connection ) a s+le family       

resid5tial r5tal prop]ty1 &  7ii7 9 !   
taxable ye> 9 :i* su* s+le family       
resid5tial r5tal prop]ty is sold4  7,b7 
,exception ,subp>agraph 7,a7 %all n     
apply unless ! sale describ$ 9 clause   
7ii7 !re( is-- 7i7 a sale to an         
individual = use z ! pr9ciple resid5ce (
 ! individual 7)9 ! mean+ ( section     
#aba71 or  7ii7 a sale to any qualifi$  
nonpr(it organization 7z def9$ 9 section
 #afc7n77#b77;,c774  7#c7 ,def9itions ,=
 purposes ( ?is subsection1 ! t]ms      
disqualifi$ s+le family prop]ty own] &  
s+le family resid5tial r5tal prop]ty h !
 respective mean+s giv5 su* t]ms "u     
section #afc7n74  7#d7 ,regulations ,!  
,secret>y %all prescribe su* regulations
 z may be necess>y or appropriate to    
c>ry out ! purposes ( ?is subsection1   
includ+ regulations to prev5t !         
avoidance ( ! purposes ( ?is subsection4
  4  7b7 ,effective date ,! am5dm5ts    
made by ?is section %all apply to       
prop]ty plac$ 9 s]vice 9 taxable ye>s   
beg9n+ aft] ! date ( ! enactm5t ( ?is   

,act4