Homeowners' Assistance Act of 2007 - Exempts any qualified mortgage relief distribution from the 10% additional tax imposed by the Internal Revenue Code on early distributions from qualified retirement plans.
Provides that the aggregate amount of distributions received by an individual which may be treated as qualified mortgage relief distributions for any taxable year shall not exceed the excess (if any) of $25,000, over the aggregate amounts treated as qualified mortgage delinquency relief distributions received by such individual for all prior taxable years.
Defines such distributions as those made from an eligible retirement plan between the enactment of this Act and January 1, 2010, if: (1) the distribution is made during any 90-day period beginning on the date of any increase in the interest rate applicable to the acquisition indebtedness of the taxpayer's principal residence; and (2) taxpayer's adjusted gross income for the taxable year of such distribution does not exceed $114,000 ($166,000 in the case of a joint return).
[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4627 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 4627
To provide for the penalty-free use of retirement funds for mortgage
relief.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 13, 2007
Mr. Fossella introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To provide for the penalty-free use of retirement funds for mortgage
relief.
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 ``Homeowners' Assistance Act of
2007''.
SEC. 2. TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS FOR MORTGAGE
RELIEF.
(a) In General.--Section 72(t) of the Internal Revenue Code of 1986
shall not apply to any qualified mortgage relief distribution.
(b) Aggregate Dollar Limitation.--
(1) In general.--For purposes of this section, the
aggregate amount of distributions received by an individual
which may be treated as qualified mortgage relief distributions
for any taxable year shall not exceed the excess (if any) of--
(A) $25,000, over
(B) the aggregate amounts treated as qualified
mortgage relief distributions received by such
individual for all prior taxable years.
(2) Treatment of plan distributions.--If a distribution to
an individual would (without regard to paragraph (1)) be a
qualified mortgage relief distribution, a plan shall not be
treated as violating any requirement of the Internal Revenue
Code of 1986 merely because the plan treats such distribution
as a qualified mortgage relief distribution, unless the
aggregate amount of such distributions from all plans
maintained by the employer (and any member of any controlled
group which includes the employer) to such individual exceeds
$25,000.
(3) Controlled group.--For purposes of paragraph (2), the
term ``controlled group'' means any group treated as a single
employer under subsection (b), (c), (m), or (o) of section 414
of such Code.
(c) Amount Distributed May Be Repaid.--
(1) In general.--Any individual who receives a qualified
mortgage relief distribution may, at any time during the 5-year
period beginning on the day after the date on which such
distribution was received, make one or more contributions in an
aggregate amount not to exceed the amount of such distribution
to an eligible retirement plan of which such individual is a
beneficiary and to which a rollover contribution of such
distribution could be made under section 402(c), 403(a)(4),
403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue
Code of 1986, as the case may be.
(2) Treatment of repayments of distributions from eligible
retirement plans other than iras.--For purposes of such Code,
if a contribution is made pursuant to paragraph (1) with
respect to a qualified mortgage relief distribution from an
eligible retirement plan other than an individual retirement
plan, then the taxpayer shall, to the extent of the amount of
the contribution, be treated as having received the qualified
mortgage relief distribution in an eligible rollover
distribution (as defined in section 402(c)(4) of such Code) and
as having transferred the amount to the eligible retirement
plan in a direct trustee to trustee transfer within 60 days of
the distribution.
(3) Treatment of repayments for distributions from iras.--
For purposes of such Code, if a contribution is made pursuant
to paragraph (1) with respect to a qualified mortgage relief
distribution from an individual retirement plan (as defined by
section 7701(a)(37) of such Code), then, to the extent of the
amount of the contribution, the qualified mortgage relief
distribution shall be treated as a distribution described in
section 408(d)(3) of such Code and as having been transferred
to the eligible retirement plan in a direct trustee to trustee
transfer within 60 days of the distribution.
(d) Definitions.--For purposes of this section--
(1) Qualified mortgage relief distribution.--Except as
provided in subsection (b), the term ``qualified mortgage
relief distribution'' means any distribution from an eligible
retirement plan made on or after the date of the enactment of
this Act and before January 1, 2010, if--
(A) such distribution is made during any 90-day
period beginning on the date of any increase which
occurs under the terms of the loan in the interest rate
applicable to acquisition indebtedness (as defined in
section 163(h)(3)(B) of the Internal Revenue Code of
1986, without regard to clause (ii) thereof) with
respect to the principal residence of the taxpayer, and
(B) the adjusted gross income (as defined in
section 62 of the such Code) of the taxpayer for the
taxable year of such distribution does not exceed
$114,000 ($166,000 in the case of a joint return under
section 6013 of such Code).
For purposes of subparagraph (A), any increase in interest rate
which occurs after May 31, 2005, and before the date of the
enactment of this Act shall be treated as occurring on such
date of enactment.
(2) Eligible retirement plan.--The term ``eligible
retirement plan'' shall have the meaning given such term by
section 402(c)(8)(B) of such Code.
(3) Principal residence.--The term ``principal residence''
has the same meaning as when used in section 121 of such Code.
(e) Income Inclusion Spread Over 5 Year Period for Qualified
Mortgage Relief Distributions.--
(1) In general.--In the case of any qualified mortgage
relief distribution, unless the taxpayer elects not to have
this subsection apply for any taxable year, any amount required
to be included in gross income for such taxable year shall be
so included ratably over the 5-taxable year period beginning
with such taxable year.
(2) Special rule.--For purposes of paragraph (1), rules
similar to the rules of subparagraph (E) of section 408A(d)(3)
of the Internal Revenue Code of 1986 shall apply.
(f) Special Rules.--
(1) Exemption of distributions from trustee to trustee
transfer and withholding rules.--For purposes of sections
401(a)(31), 402(f), and 3405 of the Internal Revenue Code of
1986, qualified mortgage relief distributions shall not be
treated as eligible rollover distributions.
(2) Qualified mortgage relief distributions treated as
meeting plan distribution requirements.--For purposes of such
Code, a qualified mortgage relief distribution shall be treated
as meeting the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such Code.
(g) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any
amendment to any plan or annuity contract, such plan or
contract shall be treated as being operated in accordance with
the terms of the plan during the period described in paragraph
(2)(B)(i).
(2) Amendments to which subsection applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is
made--
(i) pursuant to any amendment made by this
section, or pursuant to any regulation issued
by the Secretary of the Treasury or the
Secretary of Labor under this section, and
(ii) on or before the last day of the first
plan year beginning on or after January 1,
2010, or such later date as the Secretary of
the Treasury may prescribe.
In the case of a governmental plan (as defined in
section 414(d) of the Internal Revenue Code of 1986),
clause (ii) shall be applied by substituting the date
which is 2 years after the date otherwise applied under
clause (ii).
(B) Conditions.--This subsection shall not apply to
any amendment unless--
(i) during the period--
(I) beginning on the date the
legislative or regulatory amendment
described in subparagraph (A)(i) takes
effect (or in the case of a plan or
contract amendment not required by such
legislative or regulatory amendment,
the effective date specified by the
plan), and
(II) ending on the date described
in subparagraph (A)(ii) (or, if
earlier, the date the plan or contract
amendment is adopted),
the plan or contract is operated as if such
plan or contract amendment were in effect; and
(ii) such plan or contract amendment
applies retroactively for such period.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line