Homebuyer Savings Incentive Act

Homebuyer Savings Incentive Act - Amends the Internal Revenue Code to exclude from gross income any payment or distribution from an eligible retirement plan for the purpose of acquiring a first home.

 
HR 2516 IH
101st CONGRESS
1st Session
 H. R. 2516
To amend the Internal Revenue Code of 1986 to allow individuals to make
tax-free withdrawals from eligible retirement plans for the purpose of
acquiring their first homes.
IN THE HOUSE OF REPRESENTATIVES
May 31, 1989
Mr. COURTER 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 allow individuals to make
tax-free withdrawals from eligible retirement plans for the purpose of
acquiring their first homes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Homebuyer Savings Incentive Act'.
SEC. 2. EXCLUSION FROM GROSS INCOME OF WITHDRAWALS FROM ELIGIBLE RETIREMENT
PLANS USED TO ACQUIRE FIRST HOMES.
  (a) IN GENERAL- Section 72 of the Internal Revenue Code of 1986 (relating
  to annuities) is amended--
  (1) by redesignating subsection (v) as subsection (w), and
  (2) by inserting after subsection (u) the following new subsection:
  `(v) EXCLUSION FOR CERTAIN DISTRIBUTIONS USED BY INDIVIDUALS TO ACQUIRE
  FIRST HOMES-
  `(1) IN GENERAL- Notwithstanding any other provision of this chapter,
  any payment or distribution received by an individual from an eligible
  retirement plan shall not be included in gross income to the extent the
  payment or distribution--
  `(A) is used by the individual, within 30 days after the date on which
  the payment or distribution is made, to acquire a dwelling which--
  `(i) is the first dwelling in which the payee or distributee has a present
  ownership interest, and
  `(ii) is to be the principal residence of the payee or distributee, and
  `(B) is attributable to amounts paid into such plan at least 90 days before
  the date of the acquisition of the dwelling.
  `(2) REDUCTION OF BASIS- If a payment or distribution out of an eligible
  retirement plan is not includible in gross income by reason of paragraph
  (1), the basis of the payee or distributee in the dwelling involved shall
  be reduced by an amount equal to the amount of the payment or distribution
  to which such paragraph applies.
  `(3) AUTHORIZATION OF DISTRIBUTIONS- No provision of section 401 (or any
  regulation prescribed under such section) may be construed to prevent an
  eligible retirement plan from making a distribution to be used in accordance
  with paragraph (1).
  `(4) DEFINITION- For purposes of this subsection, the term `eligible
  retirement plan' means--
  `(A) any individual retirement plan (within the meaning of section
  7701(a)(3)), and
  `(B) any defined contribution plan (within the meaning of section 414(i))
  which meets the requirements of section 401(a) or 404(a)(2).'
  (b) CONFORMING AMENDMENTS- Subsection (a) of section 1016 of the Internal
  Revenue Code of 1986 (relating to adjustments to basis) is amended--
  (1) by striking `and' at the end of paragraph (23),
  (2) by striking the period at the end of paragraph (24) and inserting `;
  and', and
  (3) by adding at the end the following new paragraph:
  `(25) in the case of a dwelling the acquisition of which was made in whole
  or in part with funds from an eligible retirement plan (within the meaning
  of section 72(v)), to the extent provided in such section.'
SEC. 3. EFFECTIVE DATE.
  The amendments made by this Act shall apply to payments and distributions
  made after the date of the enactment of this Act in taxable years ending
  after such date.