I 

118TH CONGRESS 

2D SESSION H. R. 9937 

To amend the Internal Revenue Code of 1986 to deny interest and depreciation deductions for taxpayers owning 50 or more single family properties. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 4, 2024 

Mrs. SYKES (for herself, Mr. EVANS, and Ms. VELA ́ZQUEZ) 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 deny interest and depreciation deductions for taxpayers owning 

50 or more single family properties. 

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 ‘‘Stop Predatory Invest5 ing Act’’. 

6 SEC. 2. DISALLOWANCE OF INTEREST DEDUCTION FOR DIS7 QUALIFIED SINGLE FAMILY PROPERTY OWN8 ERS. 

9 (a) IN GENERAL.—Section 163 of the Internal Rev10 enue Code of 1986 is amended by redesignating subsection 


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1 (n) as subsection (o) and by inserting after subsection (m) 

2 the following new subsection: 

3 ‘‘(n) INTEREST PAID BY CERTAIN DISQUALIFIED

4 SINGLE FAMILY PROPERTY OWNERS.— 

5 ‘‘(1) IN GENERAL.—In the case of a disquali6 fied single family property owner, no deduction shall 

7 be allowed under this chapter for any interest paid 

8 or accrued in connection with any single family resi9 dential rental property owned (directly or indirectly) 

10 by such disqualified single family property owner. 

11 ‘‘(2) EXCEPTION.— 

12 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

13 not apply with respect to interest paid or ac14 crued in the taxable year in which such single 

15 family residential rental property is sold. 

16 ‘‘(B) EXCEPTION.—Subparagraph (A) 

17 shall not apply unless the sale described in such 

18 subparagraph is— 

19 ‘‘(i) a sale to an individual for use as 

20 the principle residence of the individual 

21 (within the meaning of section 121), or 

22 ‘‘(ii) a sale to any qualified nonprofit 

23 organization. 

24 ‘‘(C) QUALIFIED NONPROFIT ORGANIZA25 TION.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, the term ‘qualified non3 profit organization’ means any organiza4 tion which— 

5 ‘‘(I) is not organized for profit, 

6 and 

7 ‘‘(II) has as a principal purpose 

8 the creation, development, or preser9 vation of affordable housing. 

10 ‘‘(ii) CERTAIN ORGANIZATIONS IN11 CLUDED.—The term ‘qualified nonprofit 

12 organization’ shall include— 

13 ‘‘(I) any community development 

14 corporation (as defined in section 

15 204(b) of the Department of Veterans 

16 Affairs and Housing and Urban De17 velopment, and Independent Agencies 

18 Appropriations Act, 1997 (12 U.S.C. 

19 1715z–11a(b)), 

20 ‘‘(II) any community housing de21 velopment organization (as defined in 

22 section 104 of the Cranston-Gonzales 

23 National Affordable Housing Act (42 

24 U.S.C. 12704)), 


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1 ‘‘(III) any community-based de2 velopment organization qualified 

3 under section 570.204 of title 24, 

4 Code of Federal Regulations, as in ef5 fect on the date of the enactment of 

6 this subsection, 

7 ‘‘(IV) any land bank, 

8 ‘‘(V) any resident-owned coopera9 tive or community land trust, and 

10 ‘‘(VI) any subsidiary of a public 

11 housing agency (as defined in section 

12 3(b)(6) of the United States Housing 

13 Act of 1937 (42 U.S.C. 

14 1437a(b)(6))). 

15 ‘‘(iii) LAND BANK.—For purposes of 

16 this subparagraph, the term ‘land bank’ 

17 means a government entity, agency, or pro18 gram, or a special purpose nonprofit entity 

19 formed by one or more units of govern20 ment in accordance with State or local 

21 land bank enabling law, that has been des22 ignated by one or more State or local gov23 ernments to acquire, steward, and dispose 

24 of vacant, abandoned, or other problem 


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1 properties in accordance with locally-deter2 mined priorities and goals. 

3 ‘‘(iv) COMMUNITY LAND TRUST.—For 

4 purposes of this subparagraph, the term 

5 ‘community land trust’ means a nonprofit 

6 organization or State or local government 

7 or instrumentality that— 

8 ‘‘(I) use a ground lease or deed 

9 covenant with an affordability period 

10 of at least 30 years or more to— 

11 ‘‘(aa) make rental and 

12 homeownership units affordable 

13 to households; and 

14 ‘‘(bb) stipulate a preemptive 

15 option to purchase the affordable 

16 rentals or homeownership units 

17 so that the affordability of the 

18 units is preserved for successive 

19 income-eligible households; and 

20 ‘‘(II) monitors properties to en21 sure affordability is preserved. 

22 ‘‘(3) DISQUALIFIED SINGLE FAMILY PROPERTY

23 OWNER.—For purposes of this subsection— 

24 ‘‘(A) IN GENERAL.—The term ‘disqualified 

25 single family property owner’ means, with reVerDate Sep 11 2014 04:35 Oct 22, 2024 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H9937.IH H9937

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1 spect to any taxable year, any taxpayer who 

2 owns (directly or indirectly) 50 or more single 

3 family residential rental properties. 

4 ‘‘(B) AGGREGATION RULES.—All persons 

5 treated as a single employer under subsection 

6 (a) or (b) of section 52, or subsection (m) or 

7 (o) of section 414, shall be treated as one tax8 payer for purposes of this section. 

9 ‘‘(C) MODIFICATIONS.— 

10 ‘‘(i) IN GENERAL.—For purposes of 

11 applying subparagraph (B)— 

12 ‘‘(I) section 52(a) shall be ap13 plied by substituting ‘component 

14 members’ for ‘members’, and 

15 ‘‘(II) for purposes of applying 

16 section 52(b), the term ‘trade or busi17 ness’ shall include any activity treated 

18 as a trade or business under para19 graph (5) or (6) of section 469(c) (de20 termined without regard to the phrase 

21 ‘To the extent provided in regulations’ 

22 in such paragraph (6)). 

23 ‘‘(ii) COMPONENT MEMBER.—For 

24 purposes of this paragraph, the term ‘com25 ponent member’ has the meaning given 


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1 such term by section 1563(b), except that 

2 the determination shall be made without 

3 regard to section 1563(b)(2). 

4 ‘‘(iii) NO INFERENCE.—The modifica5 tions made by clause (i) shall not be con6 strued to create any inference with respect 

7 to the proper application of section 52 with 

8 respect to any other provision of this title. 

9 ‘‘(4) SINGLE FAMILY RESIDENTIAL RENTAL

10 PROPERTY.—For purposes of this subsection— 

11 ‘‘(A) IN GENERAL.—The term ‘single fam12 ily residential rental property’ means— 

13 ‘‘(i) any residential rental property (as 

14 defined in section 168(e)(2)(A)(i)) which 

15 contains 4 or fewer dwelling units (as de16 fined in section 168(e)(2)(A)(ii)(I)), and 

17 ‘‘(ii) improvements to real property 

18 directly related to such dwelling units lo19 cated on the site of such dwelling units. 

20 For purposes of clause (i), each townhouse or 

21 rowhouse shall be treated as a separate build22 ing. 

23 ‘‘(B) EXCEPTION FOR CERTAIN PROP24 ERTIES.—Such term shall not include any resi25 dential rental property (as so defined)— 


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1 ‘‘(i) with respect to which a credit is 

2 allowed under section 42 for such taxable 

3 year or any property, or 

4 ‘‘(ii) which— 

5 ‘‘(I) was constructed by the tax6 payer, or 

7 ‘‘(II) acquired by the taxpayer 

8 after its construction but before the 

9 first date on which any dwelling unit 

10 in such property was occupied by a 

11 resident. 

12 ‘‘(5) REGULATIONS.—The Secretary shall pre13 scribe such regulations as may be necessary or ap14 propriate to carry out the purposes of this sub15 section, including regulations to prevent the avoid16 ance of the purposes of this subsection.’’. 

17 (b) APPLICATION TO CAPITALIZED AMOUNTS.— 

18 (1) IN GENERAL.—Section 263A(f)(2) of the 

19 Internal Revenue Code of 1986 is amended by add20 ing at the end the following new subparagraph: 

21 ‘‘(D) EXCEPTION FOR CERTAIN INTEREST

22 OF DISQUALIFIED SINGLE FAMILY PROPERTY

23 OWNERS.—Subparagraph (A) shall not apply to 

24 any interest for which a deduction would be dis25 allowed under section 163(n).’’. 


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1 (2) CARRYING CHARGES.—Section 266 of such 

2 Code is amended— 

3 (A) by striking ‘‘No deduction’’ and insert4 ing the following: 

5 ‘‘(a) IN GENERAL.—No deduction’’, and 

6 (B) by adding at the end the following new 

7 subsection: 

8 ‘‘(b) SPECIAL RULE FOR CERTAIN INTEREST OF DIS9 QUALIFIED SINGLE FAMILY PROPERTY OWNERS.—No 

10 election may be made under this section to treat as 

11 chargeable to capital account any interest for which a de12 duction would be disallowed under section 163(n).’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to indebtedness incurred in taxable 

15 years beginning after the date of the enactment of this 

16 Act. 

17 SEC. 3. DISALLOWANCE OF DEPRECIATION IN CONNEC18 TION WITH PROPERTY USED BY DISQUALI19 FIED SINGLE FAMILY PROPERTY OWNERS. 

20 (a) IN GENERAL.—Section 167 of the Internal Rev21 enue Code of 1986 is amended by redesignating subsection 

22 (i) as subsection (j) and by inserting after subsection (h) 

23 the following new subsection: 

24 ‘‘(i) DEDUCTION DISALLOWED FOR DISQUALIFIED

25 SINGLE FAMILY PROPERTY OWNERS.— 


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1 ‘‘(1) IN GENERAL.—In the case of a disquali2 fied single family property owner, no deduction shall 

3 be allowed under this section for any single family 

4 residential rental property owned by such disquali5 fied single family property owner. 

6 ‘‘(2) EXCEPTION.— 

7 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

8 not apply with respect to depreciation deduction 

9 which is allowable— 

10 ‘‘(i) in connection with a single family 

11 residential rental property, and 

12 ‘‘(ii) in the taxable year in which such 

13 single family residential rental property is 

14 sold. 

15 ‘‘(B) EXCEPTION.—Subparagraph (A) 

16 shall not apply unless the sale described in 

17 clause (ii) thereof is— 

18 ‘‘(i) a sale to an individual for use as 

19 the principle residence of the individual 

20 (within the meaning of section 121), or 

21 ‘‘(ii) a sale to any qualified nonprofit 

22 organization (as defined in section 

23 163(n)(2)(C)). 

24 ‘‘(3) DEFINITIONS.—For purposes of this sub25 section, the terms ‘disqualified single family property 


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1 owner’ and ‘single family residential rental property’ 

2 have the respective meanings given such terms under 

3 section 163(n). 

4 ‘‘(4) REGULATIONS.—The Secretary shall pre5 scribe such regulations as may be necessary or ap6 propriate to carry out the purposes of this sub7 section, including regulations to prevent the avoid8 ance of the purposes of this subsection.’’. 

9 (b) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to property placed in service in 

11 taxable years beginning after the date of the enactment 

12 of this Act. 

Æ 


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