Mortgage Insurance Fairness Act - Amends the Internal Revenue Code to treat mortgage insurance premium payments as tax deductible interest. Phases out the deduction for taxpayers with adjusted gross incomes exceeding $100,000.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 132 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 132
To amend the Internal Revenue Code of 1986 to allow a deduction for
premiums on mortgage insurance, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 24, 2005
Mr. Smith (for himself and Mrs. Lincoln) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for
premiums on mortgage insurance, and for other purposes.
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 ``Mortgage Insurance Fairness Act''.
SEC. 2. PREMIUMS FOR MORTGAGE INSURANCE.
(a) In General.--Paragraph (3) of section 163(h) of the Internal
Revenue Code of 1986 (relating to qualified residence interest) is
amended by adding after subparagraph (D) the following new
subparagraph:
``(E) Mortgage insurance premiums treated as
interest.--
``(i) In general.--Premiums paid or accrued
for qualified mortgage insurance by a taxpayer
during the taxable year in connection with
acquisition indebtedness with respect to a
qualified residence of the taxpayer shall be
treated for purposes of this subsection as
qualified residence interest.
``(ii) Phaseout.--The amount otherwise
allowable as a deduction under clause (i) shall
be reduced (but not below zero) by 10 percent
of such amount for each $1,000 ($500 in the
case of a married individual filing a separate
return) (or fraction thereof) that the
taxpayer's adjusted gross income for the
taxable year exceeds $100,000 ($50,000 in the
case of a married individual filing a separate
return).''.
(b) Definition and Special Rules.--Paragraph (4) of section 163(h)
of the Internal Revenue Code of 1986 (relating to other definitions and
special rules) is amended by adding at the end the following new
subparagraphs:
``(E) Qualified mortgage insurance.--The term
`qualified mortgage insurance' means--
``(i) mortgage insurance provided by the
Veterans Administration, the Federal Housing
Administration, or the Rural Housing
Administration, and
``(ii) private mortgage insurance (as
defined by section 2 of the Homeowners
Protection Act of 1998 (12 U.S.C. 4901), as in
effect on the date of the enactment of this
subparagraph).
``(F) Special rules for prepaid qualified mortgage
insurance.--Any amount paid by the taxpayer for
qualified mortgage insurance that is properly allocable
to any mortgage the payment of which extends to periods
that are after the close of the taxable year in which
such amount is paid shall be chargeable to capital
account and shall be treated as paid in such periods to
which so allocated. No deduction shall be allowed for
the unamortized balance of such account if such
mortgage is satisfied before the end of its term. The
preceding sentences shall not apply to amounts paid for
qualified mortgage insurance provided by the Veterans
Administration or the Rural Housing Administration.''.
SEC. 3. INFORMATION RETURNS RELATING TO MORTGAGE INSURANCE.
Section 6050H of the Internal Revenue Code of 1986 (relating to
returns relating to mortgage interest received in trade or business
from individuals) is amended by adding at the end the following new
subsection:
``(h) Returns Relating to Mortgage Insurance Premiums.--
``(1) In general.--The Secretary may prescribe, by
regulations, that any person who, in the course of a trade or
business, receives from any individual premiums for mortgage
insurance aggregating $600 or more for any calendar year, shall
make a return with respect to each such individual. Such return
shall be in such form, shall be made at such time, and shall
contain such information as the Secretary may prescribe.
``(2) Statement to be furnished to individuals with respect
to whom information is required.--Every person required to make
a return under paragraph (1) shall furnish to each individual
with respect to whom a return is made a written statement
showing such information as the Secretary may prescribe. Such
written statement shall be furnished on or before January 31 of
the year following the calendar year for which the return under
paragraph (1) was required to be made.
``(3) Special rules.--For purposes of this subsection--
``(A) rules similar to the rules of subsection (c)
shall apply, and
``(B) the term `mortgage insurance' means--
``(i) mortgage insurance provided by the
Veterans Administration, the Federal Housing
Administration, or the Rural Housing
Administration, and
``(ii) private mortgage insurance (as
defined by section 2 of the Homeowners
Protection Act of 1998 (12 U.S.C. 4901), as in
effect on the date of the enactment of this
subsection).''.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall apply to amounts paid or
accrued after the date of enactment of this Act in taxable years ending
after such date.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S348)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S348)
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