Creating Homeownership Opportunity Act of 2013 - Amends the Internal Revenue Code to establish tax-exempt housing equity savings accounts to assist individual taxpayers under the age of 55 in paying the costs of acquiring, constructing, or reconstructing a principal residence. Allows: (1) a deduction from gross income for cash contributions to such accounts for the lesser of $10,000 or the compensation includible in the taxpayer's gross income for a taxable year, (2) an exclusion from gross income of amounts distributed from such accounts that are used by an account beneficiary to purchase a principal residence or make payments to such beneficiary's individual retirement account (IRA), and (3) a tax-free rollover of account funds into an IRA if an account beneficiary reaches age 55 or has maintained an account for 20 years without purchasing a residence.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2929 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 2929
To amend the Internal Revenue Code of 1986 to allow a deduction for
contributions to tax-exempt Housing Equity Savings Accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 1, 2013
Mr. Carney (for himself, Mr. Heck of Nevada, Mr. Webster of Florida,
and Mr. Welch) 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 a deduction for
contributions to tax-exempt Housing Equity Savings Accounts.
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 ``Creating Homeownership Opportunity
Act of 2013''.
SEC. 2. HOUSING EQUITY SAVINGS ACCOUNTS.
(a) In General.--Part VII of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to additional itemized
deductions for individuals) is amended by redesignating section 224 as
section 225 and by inserting after section 223 the following new
section:
``SEC. 224. HOUSING EQUITY SAVINGS ACCOUNTS.
``(a) Deduction Allowed.--In the case of an eligible individual,
there shall be allowed as a deduction the aggregate amount paid in cash
during the taxable year by or on behalf of such individual to a housing
equity savings account of such individual.
``(b) Limitation.--The amount allowable as a deduction under
subsection (a) for any taxable year shall not exceed the lesser of--
``(1) $10,000, or
``(2) an amount equal to the compensation (as defined in
section 219(f)(1)) includible in the individual's gross income
for such taxable year.
``(c) Eligible Individual.--For purposes of this section, the term
`eligible individual' means, with respect to any taxable year, any
individual if such individual (and if married, such individual's
spouse) had no present ownership interest in a principal residence
during the 3-year period ending at the close of the preceding taxable
year.
``(d) Housing Equity Savings Account.--For purposes of this
section, the term `housing equity savings account' means a trust
created or organized in the United States exclusively for the benefit
of an individual, but only if the written governing instrument creating
the trust meets the following requirements:
``(1) Except in the case of rollover contributions from
another housing equity savings account of such individual--
``(A) no contribution will be accepted unless it is
in cash, and
``(B) contributions will not be accepted for the
taxable year in excess of the dollar amount in effect
for the taxable year under subsection (b)(1).
``(2) The trustee is a bank (as defined in section 408(n))
or such other person who demonstrates to the satisfaction of
the Secretary that the manner in which such other person will
administer the trust will be consistent with the requirements
of this section.
``(3) No part of the trust funds will be invested in life
insurance contracts.
``(4) The interest of an individual in the balance in his
account is nonforfeitable.
``(5) The assets of the trust will not be commingled with
other property except in a common trust fund or common
investment fund.
``(e) Tax Treatment of Distributions.--
``(1) In general.--Except as otherwise provided in this
subsection, any amount distributed out of a housing equity
savings account shall be included in gross income of the
distributee for the taxable year in which the distribution is
received. Notwithstanding any other provision of this title
(including chapters 11 and 12), the basis of any person in such
an account is zero.
``(2) Exception for amounts used to purchase principal
residence and for certain payments to individual retirement
accounts.--
``(A) In general.--Paragraph (1) shall not apply to
any distribution during the taxable year which would
(but for this paragraph) be includible in gross income
for such year to the extent that the aggregate of such
distributions during the taxable year do not exceed the
aggregate qualified payments made by the account
beneficiary during such year.
``(B) Qualified payment.--For purposes of this
paragraph, the term `qualified payment' means--
``(i) any payment of qualified acquisition
costs (as defined in section 72(t)(8)(C))
incurred with respect to the principal
residence of the account beneficiary, and
``(ii) any payment to an individual
retirement account but only if--
``(I) the account beneficiary of
the housing equity savings account from
which the payment is made is also the
beneficiary of the individual
retirement account, and
``(II) the payment is a qualified
IRA payment.
Any payment described in clause (ii) shall be
treated for purposes of this title as a
rollover contribution to the individual
retirement account.
``(C) Qualified ira payment.--For purposes of
subparagraph (B), the term `qualified IRA payment'
means any payment if--
``(i) the account beneficiary--
``(I) is an eligible individual at
the time of the payment, and
``(II) attains age 55 as of the
close of the taxable year during which
the payment is made,
``(ii) the account beneficiary is--
``(I) an eligible individual at the
time of the payment, and
``(II) has been an eligible
individual throughout the 20-year
period ending on the date of the
payment, or
``(iii) the payment is made within 1 year
after the date of a payment described in
subparagraph (B)(i).
``(3) Exceptions for certain other distributions.--Rules
similar to the rules of paragraphs (3), (4), (5), and (6) of
section 408(d) shall apply for purposes of this section.
``(4) Additional tax on amounts included in gross income.--
If any distribution from a housing equity savings account is
includible in gross income of the account beneficiary, the tax
liability of such beneficiary under this chapter for the
taxable year in which the distribution is received shall be
increased by an amount equal to 20 percent of the amount of the
distribution.
``(f) Tax Treatment of Accounts.--
``(1) Exemption from tax.--A housing equity savings account
is exempt from taxation under this subtitle unless such account
has ceased to be a housing equity savings account by reason of
paragraph (2). Notwithstanding the preceding sentence, any such
account is subject to the taxes imposed by section 511
(relating to imposition of tax on unrelated business income of
charitable, etc. organizations).
``(2) Account terminations.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to housing
equity savings accounts, and any amount treated as distributed
under such rules shall be treated as not used to make payments
described in subsection (e)(2).
``(g) Beneficiary Must Be Under Age 55.--No deduction shall be
allowed under this section with respect to any payment to a housing
equity savings account for the benefit of an individual if such
individual has attained age 55 before the close of such individual's
taxable year for which the contribution was made.
``(h) Other Definitions and Special Rules.--
``(1) Other definitions.--For purposes of this section--
``(A) Account beneficiary.--The term `account
beneficiary' means the individual for whose benefit the
housing equity savings account was established.
``(B) Principal residence.--The term `principal
residence' has the same meaning as when used in section
121, except that such term shall include only
residences located in the United States.
``(2) Cost-of-living adjustment.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 2015, the dollar
amount in subsection (b)(1) shall be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which such taxable year begins
determined by substituting `calendar year 2014'
for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--If any increase under subparagraph
(A) is not a multiple of $50, such increase shall be
rounded to the nearest multiple of $50.
``(3) Certain rules to apply.--Rules similar to the
following rules shall apply for purposes of this section:
``(A) Section 219(d)(2) (relating to no deduction
for rollovers).
``(B) Section 219(f)(3) (relating to time when
contributions deemed made).
``(C) Section 219(f)(5) (relating to employer
payments).
``(D) Section 408(g) (relating to community
property laws).
``(E) Section 408(h) (relating to custodial
accounts).
``(i) Reports.--The trustee of a housing equity savings account
shall make such reports regarding such account to the Secretary and to
the individual for whose benefit the account is maintained with respect
to contributions, distributions, and such other matters as the
Secretary may by regulation prescribe. The reports required by this
subsection shall be filed at such time and in such manner, and
furnished to such individuals at such time and in such manner, as may
be required by such regulations.''.
(b) Deduction Allowed in Arriving at Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by inserting after
paragraph (21) the following new paragraph:
``(22) Housing equity savings account contributions.--The
deduction allowed by section 224.''.
(c) Tax on Excess Contributions.--
(1) Subsection (a) of section 4973 of such Code (relating
to tax on excess contributions to individual retirement
accounts, etc.) is amended by striking ``or'' at the end of
paragraph (4), by inserting ``or'' at the end of paragraph (5),
and by inserting after paragraph (5) the following new
paragraph:
``(6) a housing equity savings account (within the meaning
of section 224(d)),''.
(2) Section 4973 of such Code is amended by adding at the
end the following new subsection:
``(h) Excess Contributions to Housing Equity Savings Accounts.--For
purposes of this section, in the case of housing equity savings
accounts (within the meaning of section 224(d)), the term `excess
contributions' means the sum of--
``(1) the excess (if any) of--
``(A) the aggregate amount contributed for the
taxable year to the accounts (other than rollover
contributions), over
``(B) the amount allowable as a deduction under
section 224 for such contributions, and
``(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of--
``(A) the distributions out of the accounts which
were included in gross income under rules similar to
the rules of section 408(d)(5) which apply to such
accounts by reason of section 224(e)(3), and
``(B) the excess (if any) of--
``(i) the maximum amount allowable as a
deduction under section 224(b) for the taxable
year, over
``(ii) the amount contributed to the
accounts for the taxable year.
For purposes of this subsection, any contribution which is
distributed out of the housing equity savings account in a
distribution to which the rules similar to the rules of section
408(d)(4) which apply to such accounts by reason of section
224(e)(3) shall be treated as an amount not contributed.''.
(d) Tax on Prohibited Transactions.--
(1) In general.--Paragraph (1) of section 4975(e) of such
Code (relating to prohibited transactions) is amended by
striking ``or'' at the end of subparagraph (F), by
redesignating subparagraph (G) as subparagraph (H), and by
inserting after subparagraph (F) the following new
subparagraph:
``(G) a housing equity savings account described in
section 224(d), or''.
(2) Special rule.--Subsection (c) of section 4975 of such
Code is amended by adding at the end the following new
paragraph:
``(7) Special rule for housing equity savings accounts.--An
individual for whose benefit a housing equity savings account
is established shall be exempt from the tax imposed by this
section with respect to any transaction concerning such account
(which would otherwise be taxable under this section) if
section 224(f)(2) applies with respect to such transaction.''.
(e) Failure To Provide Reports on Housing Equity Savings
Accounts.--Paragraph (2) of section 6693(a) of such Code (relating to
failure to provide reports on individual retirement accounts or
annuities) is amended by striking ``and'' at the end of subparagraph
(D), by striking the period at the end of subparagraph (E) and
inserting ``, and'', and by adding at the end the following new
subparagraph:
``(F) Section 224(i) (relating to housing equity
savings accounts).''.
(f) Clerical Amendment.--The table of sections for part VII of
subchapter B of chapter 1 of such Code is amended by striking the item
relating to section 224 and inserting the following new items:
``Sec. 224. Housing equity savings accounts.
``Sec. 225. Cross references.''.
(g) Effective Date.--The amendments made by this section shall
apply to contributions for taxable years beginning after December 31,
2013.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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