Historic Homeownership Assistance Act - Amends the Internal Revenue Code to allow a tax credit for 20 percent of the qualified rehabilitation expenditures made by a taxpayer with respect to a qualified historic home. Imposes dollar limitations on such credit.
[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[H.R. 5249 Introduced in House (IH)]
103d CONGRESS
2d Session
H. R. 5249
To amend the Internal Revenue Code of 1986 to provide a credit against
income tax to individuals who rehabilitate historic homes or who are
the first purchasers of rehabilitated historic homes for use as a
principal residence.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 7, 1994
Mr. Andrews of Texas (for himself, Mrs. Kennelly, and Mr. Shaw)
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 provide a credit against
income tax to individuals who rehabilitate historic homes or who are
the first purchasers of rehabilitated historic homes for use as a
principal residence.
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 ``Historic Homeownership Assistance
Act''.
SEC. 2. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 22 the
following new section:
``SEC. 23. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.
``(a) General Rule.--In the case of an individual, there shall be
allowed as a credit against the tax imposed by this chapter for the
taxable year an amount equal to 20 percent of the qualified
rehabilitation expenditures made by the taxpayer with respect to a
qualified historic home.
``(b) Dollar Limitation.--
``(1) In general.--The credit allowed by subsection (a)
with respect to any residence of a taxpayer shall not exceed
$50,000 ($25,000 in the case of a married individual filing a
separate return).
``(2) Carryforward of credit unused by reason of limitation
based on tax liability.--If the credit allowable under
subsection (a) for any taxable year exceeds the limitation
imposed by section 26(a) for such taxable year reduced by the
sum of the credits allowable under this subpart (other than
this section), such excess shall be carried to the succeeding
taxable year and added to the credit allowable under subsection
(a) for such succeeding taxable year.
``(c) Qualified Rehabilitation Expenditure.--For purposes of this
section:
``(1) In general.--The term `qualified rehabilitation
expenditure' means any amount properly chargeable to capital
account--
``(A) in connection with the certified
rehabilitation of a qualified historic home, and
``(B) for property for which depreciation would be
allowable under section 168 if the qualified historic
home were used in a trade or business.
``(2) Certain expenditures not included.--
``(A) Exterior.--Such term shall not include any
expenditure in connection with the rehabilitation of a
building unless at least 5 percent of the total
expenditures made in the rehabilitation process are
allocable to the rehabilitation of the exterior of such
building.
``(B) Other rules to apply.--Rules similar to the
rules of clauses (ii) and (iii) of section 47(c)(2)(B)
shall apply.
``(3) Mixed use or multifamily building.--If only a portion
of a building is used as the principal residence of the
taxpayer, only qualified rehabilitation expenditures which are
properly allocable to such portion shall be taken into account
under this section.
``(d) Certified Rehabilitation.--For purposes of this section:
``(1) In general.--Except as otherwise provided in this
subsection, the term `certified rehabilitation' has the meaning
given such term by section 47(c)(2)(C).
``(2) Factors to be considered in the case of targeted area
residences, etc.--
``(A) In general.--For purposes of applying section
47(c)(2)(C) under this section with respect to the
rehabilitation of a building to which this paragraph
applies, consideration shall be given to--
``(i) the feasibility of preserving
existing architectural and design elements of
the interior of such building,
``(ii) the risk of further deterioration or
demolition of such building in the event that
certification is denied because of the failure
to preserve such interior elements, and
``(iii) the effects of such deterioration
or demolition on neighboring historic
properties.
``(B) Buildings to which this paragraph applies.--
This paragraph shall apply with respect to any
building--
``(i) any part of which is a targeted area
residence within the meaning of section
143(j)(1), or
``(ii) which is located within an
enterprise or empowerment zone,
but shall not apply with respect to any building which
is listed in the National Register or a State or local
register of historic places.
``(3) Cooperative agreements.--The term `certified
rehabilitation' includes a certification made in accordance
with a cooperative agreement between the Secretary of the
Interior and a State Historic Preservation Officer which
authorizes such officer (or a local government certified
pursuant to section 101(c)(1) of the National Historic
Preservation Act), subject to such terms or conditions as may
be specified in such agreement, to certify the rehabilitation
of buildings within the jurisdiction of such officer (or local
government) for purposes of this section.
``(e) Definitions and Special Rules.--For purposes of this section:
``(1) Qualified historic home.--The term `qualified
historic home' means a certified historic structure--
``(A) which has been substantially rehabilitated,
and
``(B) which (or any portion of which)--
``(i) is owned by the taxpayer, and
``(ii) is used (or will, within a
reasonable period, be used) by such taxpayer as
his principal residence.
``(2) Substantially rehabilitated.--The term `substantially
rehabilitated' has the meaning given such term by section
47(c)(1)(C); except that, in the case of any building described
in subsection (d)(2), clause (i)(I) thereof shall not apply.
``(3) Principal residence.--The term `principal residence'
has the same meaning as when used in section 1034.
``(4) Certified historic structure.--The term `certified
historic structure' has the meaning given such term by section
47(c)(3).
``(5) Enterprise or empowerment zone.--The term `enterprise
or empowerment zone' means any area designated under section
1391 as an enterprise community or an empowerment zone.
``(6) Rehabilitation not complete before certification.--A
rehabilitation shall not be treated as complete before the date
of the certification referred to in subsection (d).
``(7) Lessees.--A taxpayer who leases his principal
residence shall, for purposes of this section, be treated as
the owner thereof if the remaining term of the lease (as of the
date determined under regulations prescribed by the Secretary)
is not less than such minimum period as the regulations
require.
``(f) When Expenditures Taken Into Account.--In the case of a
building other than a building to which subsection (g) applies,
qualified rehabilitation expenditures shall be treated for purposes of
this section as made--
``(1) on the date the rehabilitation is completed, or
``(2) to the extent provided by the Secretary by
regulation, when such expenditures are properly chargeable to
capital account.
Regulations under paragraph (2) shall include a rule similar to the
rule under section 50(a)(2) (relating to recapture if property ceases
to qualify for progress expenditures).
``(g) Allowance of Credit for Purchase of Rehabilitated Historic
Home.--
``(1) In general.--In the case of a qualified purchased
historic home, the taxpayer shall be treated as having made (on
the date of purchase) the qualified rehabilitation expenditures
made by the seller of such home.
``(2) Qualified purchased historic home.--For purposes of
this subsection, the term `qualified purchased historic home'
means any substantially rehabilitated certified historic
structure purchased by the taxpayer if--
``(A) the taxpayer is the first purchaser of such
structure after the date rehabilitation is completed,
and the purchase occurs within 5 years after such date,
``(B) the structure (or a portion thereof) will,
within a reasonable period, be the principal residence
of the taxpayer,
``(C) no credit was allowed to the seller under
this section or section 47 with respect to such
rehabilitation, and
``(D) the taxpayer is furnished with such
information as the Secretary determines is necessary to
determine the credit under this subsection.
``(h) Historic Rehabilitation Mortgage Credit Certificate.--
``(1) In general.--The taxpayer may elect, in lieu of the
credit otherwise allowable under this section, to receive a
historic rehabilitation mortgage credit certificate. An
election under this paragraph shall be made--
``(A) in the case of a building to which subsection
(g) applies, at the time of purchase, or
``(B) in any other case, at the time rehabilitation
is completed.
``(2) Historic rehabilitation mortgage credit
certificate.--For purposes of this subsection, the term
`historic rehabilitation mortgage credit certificate' means a
certificate--
``(A) issued to the taxpayer, in accordance with
procedures prescribed by the Secretary, with respect to
a certified rehabilitation,
``(B) the face amount of which shall be equal to
the credit which would (but for this subsection) be
allowable under subsection (a) to the taxpayer with
respect to such rehabilitation,
``(C) which may only be transferred by the taxpayer
to a lending institution in connection with a loan--
``(i) that is secured by the building with
respect to which the credit relates, and
``(ii) the proceeds of which may not be
used for any purpose other than the acquisition
or rehabilitation of such building, and
``(D) in exchange for which such lending
institution provides the taxpayer a reduction
(determined as provided in such regulations) in the
rate of interest on the loan.
``(3) Use of certificate by lender.--The amount of the
credit specified in the certificate shall be allowed to the
lender only to offset the regular tax (as defined in section
55(c)) of such lender. The lender may carry forward all unused
amounts under this subsection until exhausted.
``(i) Recapture.--
``(1) In general.--If, before the end of the 5-year period
beginning on the date on which the rehabilitation of the
building is completed (or, if subsection (g) applies, the date
of purchase of such building by the taxpayer)--
``(A) the taxpayer disposes of such taxpayer's
interest in such building, or
``(B) such building ceases to be used as the
principal residence of the taxpayer,
the taxpayer's tax imposed by this chapter for the taxable year
in which such disposition or cessation occurs shall be
increased by the recapture percentage of the credit allowed
under this section for all prior taxable years with respect to
such rehabilitation.
``(2) Recapture percentage.--For purposes of paragraph (1),
the recapture percentage shall be determined in accordance with
the table under section 50(a)(1)(B), deeming such table to be
amended--
``(A) by striking `If the property ceases to be
investment credit property within--' and inserting `If
the disposition or cessation occurs within--', and
``(B) in clause (i) by striking `One full year
after placed in service' and inserting `One full year
after the taxpayer becomes entitled to the credit'.
``(j) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section for any expenditure with respect
to any property (including any purchase under subsection (g) and any
transfer under subsection (h)), the increase in the basis of such
property which would (but for this subsection) result from such
expenditure shall be reduced by the amount of the credit so allowed.
``(k) Processing Fees.--Proceeds of fees levied for the processing
of applications for the certification of any rehabilitation under this
section--
``(1) shall be deposited in a trust fund, and
``(2) subject to appropriations Acts, may be used only to
defray expenses associated with the processing of such
applications.
``(l) Denial of Double Benefit.--No credit shall be allowed under
this section for any amount for which credit is allowed under section
47.
``(m) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to carry out the purposes of this section,
including regulations where less than all of a building is used as a
principal residence and where more than 1 taxpayer use the same
dwelling unit as their principal residence.''
(b) Conforming Amendment.--Subsection (a) of section 1016 of such
Code is amended by striking ``and'' at the end of paragraph (24), by
striking the period at the end of paragraph (25) and inserting ``,
and'', and by adding at the end the following new item:
``(26) to the extent provided in section 23(j).''
(c) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 22 the following new item:
``Sec. 23. Historic homeownership rehabilitation credit.''
(d) Effective Date.--The amendments made by this section shall
apply with respect to rehabilitations the physical work on which begins
after the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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