Distressed Communities Reinvestment Act of 2009

Distressed Communities Reinvestment Act of 2009 - Amends the Internal Revenue Code to exclude from gross income gain from the sale of real property consisting predominantly of commercial and residential property located in a distressed community. Defines "distressed community" as a county designated by the Secretary of the Treasury as: (1) having, during a specified period, a residential or commercial mortgage foreclosure rate of 110% or more of the national average, a decline in the average fair market value of housing of at least 20%, or an unemployment rate of 110% or more of the national average; (2) having more than 50% of its housing loans with a loan-to-value ratio of greater than 80%; or (3) being in a disaster area.

[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3812 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3812

 To amend the Internal Revenue Code of 1986 to encourage businesses to 
purchase commercial and residential property in distressed communities 
          by providing an exclusion from tax on certain gains.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 14, 2009

  Ms. Kosmas 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 businesses to 
purchase commercial and residential property in distressed communities 
          by providing an exclusion from tax on certain gains.

    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 ``Distressed Communities Reinvestment 
Act of 2009''.

SEC. 2. EXCLUSION OF CERTAIN CAPITAL GAINS ON COMMERCIAL AND 
              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:

``SEC. 139D. CAPITAL GAINS ON CERTAIN COMMERCIAL AND RESIDENTIAL 
              PROPERTY.

    ``(a) In General.--Gross income shall not include gain from the 
sale of real property consisting predominantly of commercial and 
residential property if--
            ``(1) such property is located in a distressed community,
            ``(2) such property is acquired by the taxpayer by purchase 
        (as defined in section 179(d)(2)) during the 24-month period 
        beginning on the date of the enactment of this section, and
            ``(3) such property is held by the taxpayer continuously 
        during the 5-year period ending on the date of the sale of such 
        property.
    ``(b) Distressed Community.--For purposes of this section--
            ``(1) In general.--The term `distressed community' means a 
        county that the Secretary designates as--
                    ``(A) having, for any month during the applicable 
                period--
                            ``(i) a residential mortgage foreclosure 
                        rate of 110 percent or more of the national 
                        average,
                            ``(ii) a commercial mortgage foreclosure 
                        rate of 110 percent or more of the national 
                        average,
                            ``(iii) a decline in the average fair 
                        market value of housing of at least 20 percent, 
                        or
                            ``(iv) an unemployment rate of 110 percent 
                        or more of the national average,
                    ``(B) being a county in which, for a calendar year 
                during the applicable period, more than 50 percent of 
                loans secured by housing had a loan-to-value ratio of 
                greater than 80 percent, or
                    ``(C) being in a disaster area (as defined in 
                section 165(h)(3)(C)) as a result of a federally 
                declared disaster that occurred during the applicable 
                period.
            ``(2) Applicable period.--The term `applicable period' 
        means--
                    ``(A) in the case of subparagraphs (A) and (B) of 
                paragraph (1), the period beginning on January 1, 2008, 
                and ending on the date which is 2 years after the date 
                of the enactment of the Distressed Communities 
                Reinvestment Act of 2009, and
                    ``(B) in the case of subparagraph (C) of paragraph 
                (1), the 4-year period ending on the date which is 2 
                years after the date of the enactment of such Act.''.
    (b) Conforming 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:

``139D. Capital gains on certain commercial and 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.
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