I 

109TH CONGRESS 

1ST SESSION H. R. 3098 

To amend the Internal Revenue Code of 1986 to allow a deduction for 

premiums on mortgage insurance, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 28, 2005 

Mr. RYAN of Wisconsin (for himself, Mr. JEFFERSON, and Mr. CANTOR) 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 premiums on mortgage insurance, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Mortgage Insurance 

5 Fairness Act of 2005’’. 

6 SEC. 2. PREMIUMS FOR MORTGAGE INSURANCE. 

7 (a) IN GENERAL.—Paragraph (3) of section 163(h) 

8 of the Internal Revenue Code of 1986 (relating to quali-
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1 fied residence interest) is amended by adding after sub2 paragraph (D) the following new subparagraph: 

3 ‘‘(E) MORTGAGE INSURANCE PREMIUMS

4 TREATED AS INTEREST.— 

5 ‘‘(i) IN GENERAL.—Premiums paid or 

6 accrued for qualified mortgage insurance 

7 by a taxpayer during the taxable year in 

8 connection with acquisition indebtedness 

9 with respect to a qualified residence of the 

10 taxpayer shall be treated for purposes of 

11 this subsection as qualified residence inter12 est. 

13 ‘‘(ii) PHASEOUT.—The amount other14 wise allowable as a deduction under clause 

15 (i) shall be reduced (but not below zero) by 

16 10 percent of such amount for each $1,000 

17 ($500 in the case of a married individual 

18 filing a separate return) (or fraction there19 of) that the taxpayer’s adjusted gross in20 come for the taxable year exceeds 

21 $100,000 ($50,000 in the case of a mar22 ried individual filing a separate return).’’. 

23 (b) DEFINITION AND SPECIAL RULES.—Paragraph 

24 (4) of section 163(h) of the Internal Revenue Code of 
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1 1986 (relating to qualified residence interest) is amended 

2 by adding at the end the following new subparagraphs: 

3 ‘‘(E) QUALIFIED MORTGAGE INSUR4 ANCE.—The term ‘qualified mortgage insur5 ance’ means— 

6 ‘‘(i) mortgage insurance provided by 

7 the Veterans Administration, the Federal 

8 Housing Administration, or the Rural 

9 Housing Administration, and 

10 ‘‘(ii) private mortgage insurance (as 

11 defined by section 2 of the Homeowners 

12 Protection Act of 1998 (12 U.S.C. 4901), 

13 as in effect on the date of the enactment 

14 of this subparagraph). 

15 ‘‘(F) SPECIAL RULES FOR PREPAID QUALI16 FIED MORTGAGE INSURANCE.—Any amount 

17 paid by the taxpayer for qualified mortgage in18 surance that is properly allocable to any mort19 gage the payment of which extends to periods 

20 that are after the close of the taxable year in 

21 which such amount is paid shall be chargeable 

22 to capital account and shall be treated as paid 

23 in such periods to which so allocated. No deduc24 tion shall be allowed for the unamortized bal25 ance of such account if such mortgage is satis-
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1 fied before the end of its term. The preceding 

2 sentences shall not apply to amounts paid for 

3 qualified mortgage insurance provided by the 

4 Veterans Administration or the Rural Housing 

5 Administration.’’. 

6 SEC. 3. INFORMATION RETURNS RELATING TO MORTGAGE 

7 INSURANCE. 

8 Section 6050H of the Internal Revenue Code of 1986 

9 (relating to information returns relating to mortgage in10 terest) is amended by adding at the end the following new 

11 subsection: 

12 ‘‘(h) RETURNS RELATING TO MORTGAGE INSURANCE

13 PREMIUMS.— 

14 ‘‘(1) IN GENERAL.—The Secretary may pre15 scribe, by regulations, that any person who, in the 

16 course of a trade or business, receives from any indi17 vidual premiums for mortgage insurance aggregating 

18 $600 or more for any calendar year shall make a re19 turn with respect to each such individual. Such re20 turn shall be in such form, shall be made at such 

21 time, and shall contain such information as the Sec22 retary may prescribe. 

23 ‘‘(2) STATEMENT TO BE FURNISHED TO INDI24 VIDUALS WITH RESPECT TO WHOM INFORMATION IS

25 REQUIRED.—Every person required to make a re-
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1 turn under paragraph (1) shall furnish to each indi2 vidual with respect to whom a return is made a writ3 ten statement showing such information as the Sec4 retary may prescribe. Such written statement shall 

5 be furnished on or before January 31 of the year 

6 following the calendar year for which the return 

7 under paragraph (1) was required to be made. 

8 ‘‘(3) SPECIAL RULES.—For purposes of this 

9 subsection— 

10 ‘‘(A) rules similar to the rules of sub11 section (c) shall apply, and 

12 ‘‘(B) the term ‘mortgage insurance’ 

13 means— 

14 ‘‘(i) mortgage insurance provided by 

15 the Veterans Administration, the Federal 

16 Housing Administration or the Rural 

17 Housing Administration, and 

18 ‘‘(ii) private mortgage insurance (as 

19 defined by section 2 of the Homeowners 

20 Protection Act of 1998 (12 U.S.C. 4901), 

21 as in effect on the date of the enactment 

22 of this subparagraph.’’. 
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1 SEC. 4. EFFECTIVE DATE. 

2 The amendments made by this Act shall apply to 

3 amounts paid or accrued after the date of enactment of 

4 this Act in taxable years ending after such date. 

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