H.R. 1784

Investment Property Opportunity Act of 2009

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I

111th CONGRESS

1st Session

H. R. 1784

IN THE HOUSE OF REPRESENTATIVES

March 30, 2009

Mr. Polis of Colorado introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to encourage the purchase of residential property by providing an exclusion from tax on certain gains.

1.

Short title

This Act may be cited as the Investment Property Opportunity Act of 2009.

2.

Exclusion of certain capital gains on residential property

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139C the following new section:

139D.

Capital gains on certain residential property

(a)

In general

Gross income shall not include gain from the sale of real property consisting predominantly of residential property if—

(1)

such property is located in a distressed housing area,

(2)

such property is acquired by purchase (as defined in section 179(d)(2)) during the 18-month period beginning on the date of the enactment of this section, and

(3)

such property is held for more than 3 years.

(b)

Distressed housing area

For purposes of this section, the term distressed housing area means any county which is designated by the Secretary as having, with respect to residential housing located in such county—

(1)

a mortgage foreclosure rate during 2008 which was 110 percent or more of the national average of such rate,

(2)

a decline during 2008 in the average fair market value of such housing of at least 20 percent, or

(3)

more than 50 percent of the loans which are secured by such housing as having a loan to value ratio of greater than 80 percent (determined as of the end of 2008).

(c)

Exception for sales between related persons

(1)

In general

Subsection (a) shall not apply to any sale between related persons.

(2)

Related persons

For purposes of this subsection, a person shall be treated as related to another person if the relationship between such persons would result in a disallowance of losses under section 267 or 707(b).

.

(b)

Clerical amendment

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139C the following new item:

Sec. 139D. Capital gains on certain residential property.

.

(c)

Effective date

The amendments made by this section shall apply to property purchased after the date of the enactment of this section.