To amend the Internal Revenue Code of 1986 to provide an income tax credit for certain home purchases, and to transfer to the Treasury unobligated funds made available by the American Recovery and Reinvestment Act in the amount of the reduction in revenue resulting from such credit.

SA 2306. Mr. ISAKSON submitted an amendment intended to be proposed
by him to the bill H.R. 3435, making supplemental appropriations for
fiscal year 2009 for the Consumer Assistance to Recycle and Save
Program; which was ordered to lie on the table; as follows:

On page 3, after line 11, insert the following:
Effective on the date of the enactment of this Act--
(1) In general.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after section 25D the following new section:

``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.

``(a) Allowance of Credit.--
``(1) In general.--In the case of an individual who is a
purchaser of a principal residence during the taxable year,
there shall be allowed as a credit against the tax imposed by
this chapter an amount equal to 10 percent of the purchase
price of the residence.
``(2) Dollar limitation.--The amount of the credit allowed
under paragraph (1) shall not exceed $15,000.
``(3) Allocation of credit amount.--At the election of the
taxpayer, the amount of the credit allowed under paragraph
(1) (after application of paragraph (2)) may be equally
divided among the 2 taxable years beginning with the taxable
year in which the purchase of the principal residence is
made.
``(b) Limitations.--
``(1) Date of purchase.--The credit allowed under
subsection (a) shall be allowed only with respect to
purchases made--
``(A) after the date of the enactment of the Act entitled
`Making supplemental appropriations for fiscal year 2009 for
the Consumer Assistance to Recycle and Save Program.', and
``(B) on or before the date that is 1 year after such date
of enactment.
``(2) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section) for the taxable year.
``(3) One-time only.--
``(A) In general.--If a credit is allowed under this
section in the case of any individual (and such individual's
spouse, if married) with respect to the purchase of any
principal residence, no credit shall be allowed under this
section in any taxable year with respect to the purchase of
any other principal residence by such individual or a spouse
of such individual.
``(B) Joint purchase.--In the case of a purchase of a
principal residence by 2 or more unmarried individuals or by
2 married individuals filing separately, no credit shall

[[Page S8876]]

be allowed under this section if a credit under this section
has been allowed to any of such individuals in any taxable
year with respect to the purchase of any other principal
residence.
``(c) Principal Residence.--For purposes of this section,
the term `principal residence' has the same meaning as when
used in section 121.
``(d) Denial of Double Benefit.--No credit shall be allowed
under this section for any purchase for which a credit is
allowed under section 36 or section 1400C.
``(e) Special Rules.--
``(1) Joint purchase.--
``(A) Married individuals filing separately.--In the case
of 2 married individuals filing separately, subsection (a)
shall be applied to each such individual by substituting
`$7,500' for `$15,000' in subsection (a)(1).
``(B) Unmarried individuals.--If 2 or more individuals who
are not married purchase a principal residence, the amount of
the credit allowed under subsection (a) shall be allocated
among such individuals in such manner as the Secretary may
prescribe, except that the total amount of the credits
allowed to all such individuals shall not exceed $15,000.
``(2) Purchase.--In defining the purchase of a principal
residence, rules similar to the rules of paragraphs (2) and
(3) of section 1400C(e) (as in effect on the date of the
enactment of this section) shall apply.
``(3) Reporting requirement.--Rules similar to the rules of
section 1400C(f) (as so in effect) shall apply.
``(f) Recapture of Credit in the Case of Certain
Dispositions.--
``(1) In general.--In the event that a taxpayer--
``(A) disposes of the principal residence with respect to
which a credit was allowed under subsection (a), or
``(B) fails to occupy such residence as the taxpayer's
principal residence,

at any time within 24 months after the date on which the
taxpayer purchased such residence, then the tax imposed by
this chapter for the taxable year during which such
disposition occurred or in which the taxpayer failed to
occupy the residence as a principal residence shall be
increased by the amount of such credit.
``(2) Exceptions.--
``(A) Death of taxpayer.--Paragraph (1) shall not apply to
any taxable year ending after the date of the taxpayer's
death.
``(B) Involuntary conversion.--Paragraph (1) shall not
apply in the case of a residence which is compulsorily or
involuntarily converted (within the meaning of section
1033(a)) if the taxpayer acquires a new principal residence
within the 2-year period beginning on the date of the
disposition or cessation referred to in such paragraph.
Paragraph (1) shall apply to such new principal residence
during the remainder of the 24-month period described in such
paragraph as if such new principal residence were the
converted residence.
``(C) Transfers between spouses or incident to divorce.--In
the case of a transfer of a residence to which section
1041(a) applies--
``(i) paragraph (1) shall not apply to such transfer, and
``(ii) in the case of taxable years ending after such
transfer, paragraph (1) shall apply to the transferee in the
same manner as if such transferee were the transferor (and
shall not apply to the transferor).
``(D) Relocation of members of the armed forces.--Paragraph
(1) shall not apply in the case of a member of the Armed
Forces of the United States on active duty who moves pursuant
to a military order and incident to a permanent change of
station.
``(3) Joint returns.--In the case of a credit allowed under
subsection (a) with respect to a joint return, half of such
credit shall be treated as having been allowed to each
individual filing such return for purposes of this
subsection.
``(4) Return requirement.--If the tax imposed by this
chapter for the taxable year is increased under this
subsection, the taxpayer shall, notwithstanding section 6012,
be required to file a return with respect to the taxes
imposed under this subtitle.
``(g) Basis Adjustment.--For purposes of this subtitle, if
a credit is allowed under this section with respect to the
purchase of any residence, the basis of such residence shall
be reduced by the amount of the credit so allowed.
``(h) Election to Treat Purchase in Prior Year.--In the
case of a purchase of a principal residence after December
31, 2009, and on or before the date described in subsection
(b)(1)(B), a taxpayer may elect to treat such purchase as
made on December 31, 2009, for purposes of this section.''.
(2) Conforming amendments.--
(A) Section 24(b)(3)(B) of the Internal Revenue Code of
1986 is amended by striking ``and 25B'' and inserting ``,
25B, and 25E''.
(B) Section 25(e)(1)(C)(ii) of such Code is amended by
inserting ``25E,'' after ``25D,''.
(C) Section 25B(g)(2) of such Code is amended by striking
``section 23'' and inserting ``sections 23 and 25E''.
(D) Section 904(i) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25E''.
(E) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (36), by striking the period
at the end of paragraph (37) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(38) to the extent provided in section 25E(g).''.
(3) Clerical amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by inserting after the item
relating to section 25D the following new item:

``Sec. 25E. Credit for certain home purchases.''.

(4) Sunset of current first-time homebuyer credit.--
(A) In general.--Subsection (h) of section 36 of the
Internal Revenue Code of 1986 is amended by striking ``before
December 1, 2009'' and inserting ``on or before the date of
the enactment of the Act entitled `Making supplemental
appropriations for fiscal year 2009 for the Consumer
Assistance to Recycle and Save Program.' ''.
(B) Election to treat purchase in prior year.--Subsection
(g) of section 36 of the Internal Revenue Code of 1986 is
amended by striking ``before December 1, 2009'' and inserting
``on or before the date of the enactment of the Act entitled
`Making supplemental appropriations for fiscal year 2009 for
the Consumer Assistance to Recycle and Save Program.' ''.
(5) Effective date.--The amendments made by paragraphs (1)
through (4) shall apply to purchases after the date of the
enactment of this Act.
(6) Transfers to the general fund.--From time to time, the
Secretary of the Treasury shall transfer to the general fund
of the Treasury an amount equal to the reduction in revenues
to the Treasury resulting from the amendments made by
paragraphs (1) through (4) of this subsection.
Notwithstanding section 5 of the American Recovery and
Reinvestment Act of 2009 (Pub. Law 111-5), such amounts shall
be transferred from the amounts appropriated or made
available and remaining unobligated under such Act.

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