I 

111TH CONGRESS 

1ST SESSION H. R. 1903 

To provide incentives for the residential housing market. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 2, 2009 

Mr. CANTOR (for himself, Mr. LEE of New York, Mr. DREIER, Mrs. BIGGERT, 

Mr. BRADY of Texas, Mr. MCCARTHY of California, Mr. CASSIDY, Mr. 

CAMPBELL, Mrs. BONO MACK, Mr. PAULSEN, and Mr. BOUSTANY) introduced the following bill; which was referred to the Committee on Ways 

and Means, and in addition to the Committees on Financial Services and 

the Judiciary, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To provide incentives for the residential housing market. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Responsible Homeowners Act of 2009’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Stopping mortgage fraud. 

Sec. 3. Tax credit for mortgage refinancing. 


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Sec. 4. Tax incentives for voluntary mortgage modifications. 

Sec. 5. Servicer safe harbor for mortgage loan modifications. 

Sec. 6. Credit for certain home purchases. 

Sec. 7. Certain gains on single-family residential rental property excluded from 

gross income. 

1 SEC. 2. STOPPING MORTGAGE FRAUD. 

2 (a) PRIORITY OF EFFORTS.—The Secretary of Hous3 ing and Urban Development, the Assistant Secretary for 

4 Housing—Federal Housing Commissioner of the Depart5 ment of Housing and Urban Development, and the Direc6 tor of the Federal Housing Finance Agency, shall give in7 creased priority to efforts and activities to detect, identify, 

8 reduce, and report fraud in residential mortgage lending, 

9 including in the marketing, offering, origination, under10 writing, servicing, and refinancing of residential mort11 gages, and in all other aspects of residential mortgage 

12 lending. Such efforts and activities shall include increasing 

13 the number of personnel assigned specifically to mortgage 

14 fraud detection. 

15 (b) AUTHORIZATION OF APPROPRIATIONS.—For fis16 cal years 2009, 2010, 2011, 2012, and 2013, there are 

17 authorized to be appropriated to the Attorney General a 

18 total of— 

19 (1) $31,250,000 to support the employment of 

20 30 additional agents of the Federal Bureau of Inves21 tigation and 2 additional dedicated prosecutors at 

22 the Department of Justice to coordinate prosecution 


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1 of mortgage fraud efforts with the offices of the 

2 United States Attorneys; and 

3 (2) $750,000 to support the operations of inter4 agency task forces of the Federal Bureau of Inves5 tigation in the areas with the 15 highest concentra6 tions of mortgage fraud. 

7 SEC. 3. TAX CREDIT FOR MORTGAGE REFINANCING. 

8 (a) ALLOWANCE OF CREDIT.—Subpart A of part IV 

9 of subchapter A of chapter 1 of the Internal Revenue Code 

10 of 1986 is amended by inserting after section 25D the fol11 lowing new section: 

12 ‘‘SEC. 25E. CREDIT FOR MORTGAGE REFINANCING. 

13 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in14 dividual who completes a refinancing of a qualified resi15 dential mortgage during the taxable year, there shall be 

16 allowed as a credit against the tax imposed by this subtitle 

17 for such taxable year an amount equal to $5,000. 

18 ‘‘(b) DEFINITIONS.—For purposes of this section— 

19 ‘‘(1) QUALIFIED RESIDENTIAL MORTGAGE.— 

20 The term ‘qualified residential mortgage’ means in21 debtedness which is secured by the taxpayer’s prin22 cipal residence (within the meaning of section 121). 

23 Such term shall not include any indebtedness which 

24 is secured by a residence which is located outside the 

25 United States. 


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1 ‘‘(2) REFINANCING.—The term ‘refinancing’ 

2 means a qualified residential mortgage any portion 

3 of the proceeds of which are used to satisfy the tax4 payer’s entire obligation under another qualified res5 idential mortgage. 

6 ‘‘(c) COORDINATION WITH HOME BUYER CRED7 ITS.—No credit shall be allowed under this section for any 

8 taxable year if the taxpayer is allowed a credit under sec9 tion 25F, 36, or 1400C for such taxable year or any prior 

10 taxable year. No credit shall be allowed under sections 

11 25F, 36, or 1400C for any taxable year if the taxpayer 

12 is allowed a credit under this subsection (a) for any prior 

13 taxable year. 

14 ‘‘(d) EXCEPTION FOR NONRESIDENT ALIEN INDIVID15 UALS.—No credit shall be allowed under subsection (a) to 

16 any taxpayer if such taxpayer is a nonresident alien indi17 vidual. 

18 ‘‘(e) ELECTION.—A taxpayer may elect to have sub19 section (a) not apply for any taxable year. 

20 ‘‘(f) TERMINATION.—This section shall not apply to 

21 any refinancing completed after June 30, 2010.’’. 

22 (b) CLERICAL AMENDMENT.—The table of sections 

23 for subpart A of part IV of subchapter A of chapter 1 

24 of such Code is amended by inserting after the item relat25 ing to section 25D the following new item: 

‘‘Sec. 25E. Credit for mortgage refinancing.’’. 


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

2 this section shall apply to refinancings completed after the 

3 date of the enactment of this Act, in taxable years ending 

4 after such date. 

5 SEC. 4. TAX INCENTIVES FOR VOLUNTARY MORTGAGE 

6 MODIFICATIONS. 

7 (a) EXCLUSION OF QUALIFIED APPRECIATION PAY8 MENTS.— 

9 (1) IN GENERAL.—Part III of subchapter B of 

10 chapter 1 of the Internal Revenue Code of 1986 is 

11 amended by inserting after section 139C the fol12 lowing new section: 

13 ‘‘SEC. 139D. MORTGAGE MODIFICATION INCOME. 

14 ‘‘(a) IN GENERAL.—In the case of a lender who en15 ters into a qualified mortgage workout with a borrower, 

16 gross income shall not include any qualified appreciation 

17 payment made pursuant to such workout. 

18 ‘‘(b) QUALIFIED MORTGAGE WORKOUT.—For pur19 poses of this section, the term ‘qualified mortgage work20 out’ means legally binding modifications to a qualified 

21 mortgage which provide for each of the following: 

22 ‘‘(1) Monthly payments under the mortgage 

23 which do not exceed 38 percent of the gross monthly 

24 income of the borrower. 


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1 ‘‘(2) Such modifications shall achieve the re2 quirement of paragraph (1) by means of one or more 

3 of the following: 

4 ‘‘(A) A reduction in the interest rate of the 

5 loan. 

6 ‘‘(B) An extension of the term of the loan 

7 (but not greater than 40 years). 

8 ‘‘(C) A reduction in the principal amount 

9 of the loan. 

10 ‘‘(3) Provides the lender with a right to a pay11 ment of a share of any appreciation in the value of 

12 the residence which secures the loan upon the dis13 position of the residence by the borrower. 

14 ‘‘(c) OTHER DEFINITIONS AND SPECIAL RULE.—For 

15 purposes of this section— 

16 ‘‘(1) QUALIFIED MORTGAGE.—The term ‘quali17 fied mortgage’ means indebtedness— 

18 ‘‘(A) which is secured by a principal resi19 dence (within the meaning of section 121) 

20 which is located in the United States, and 

21 ‘‘(B) which fails to meet the requirement 

22 of subsection (b)(1). 

23 ‘‘(2) QUALIFIED APPRECIATION PAYMENT.— 

24 The term ‘qualified appreciation payment’ means the 

25 payment described in subsection (b)(4). 


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1 ‘‘(3) TREATMENT OF REFINANCINGS.—A refi2 nancing of a qualified mortgage shall be treated in 

3 the same manner as a modification to such mort4 gage. 

5 ‘‘(d) TERMINATION.—Subsection (a) shall not apply 

6 to any qualified mortgage workout which becomes legally 

7 binding after June 30, 2010.’’. 

8 (2) CONFORMING AMENDMENT.—The table of 

9 sections for part III of subchapter B of chapter 1 

10 of such Code is amended by inserting after the item 

11 relating to section 139C the following new item: 

‘‘Sec. 139D. Mortgage modification income.’’. 

12 (b) EXCLUSION OF DEBT CANCELLED PURSUANT TO

13 A QUALIFIED MORTGAGE WORKOUT.— 

14 (1) IN GENERAL.—Paragraph (1) of section 

15 108(a) of such Code is amended by striking ‘‘or’’ at 

16 the end of the subparagraph (D), by striking the pe17 riod at the end of subparagraph (E) and inserting 

18 ‘‘, or’’, and by adding at the end the following new 

19 subparagraph: 

20 ‘‘(F) the indebtedness is a qualified mort21 gage (as defined in section 139D(c)(1)) and is 

22 discharged in connection with a qualified mort23 gage workout to which section 139D(a) ap24 plies.’’. 


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1 (2) BASIS REDUCTION.—Subsection (h) of sec2 tion 108 of such Code is amended— 

3 (A) by striking ‘‘subsection (a)(1)(E)’’ in 

4 paragraph (1) and inserting ‘‘subparagraph (E) 

5 or (F) of subsection (a)(1)’’, and 

6 (B) by striking ‘‘QUALIFIED’’ in the head7 ing of such subsection. 

8 (3) COORDINATION OF EXCLUSIONS.—Para9 graph (2) of section 108(a) of such Code is amend10 ed— 

11 (A) by striking ‘‘and (E)’’ in subparagraph 

12 (A) and inserting ‘‘(E), and (F)’’, and 

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

14 subparagraph: 

15 ‘‘(D) MORTGAGE WORKOUT EXCLUSION

16 TAKES PRECEDENCE UNLESS ELECTED OTHER17 WISE.—Subparagraphs (B) and (E) shall not 

18 apply to a discharge to which paragraph (1)(F) 

19 applies unless the taxpayer elects to have para20 graph (1)(F) not apply.’’. 

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

22 this section shall apply to qualified mortgage workouts 

23 (within the meaning of section 139D of the Internal Rev24 enue Code of 1986, as added by this section) which beVerDate Nov 24 2008 23:58 Apr 07, 2009 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1903.IH H1903

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1 come legally binding after the date of the enactment of 

2 this Act. 

3 SEC. 5. SERVICER SAFE HARBOR FOR MORTGAGE LOAN 

4 MODIFICATIONS. 

5 (a) SAFE HARBOR.— 

6 (1) LOAN MODIFICATIONS AND WORKOUT

7 PLANS.—Notwithstanding any other provision of 

8 law, and notwithstanding any investment contract 

9 between a servicer and a securitization vehicle or in10 vestor, a servicer that acts consistent with the duty 

11 set forth in section 129A(a) of Truth in Lending Act 

12 (15 U.S.C. 1639a) shall not be liable for entering 

13 into a loan modification, workout, or other loss miti14 gation plan, including, but not limited to, disposi15 tion, including any modification or refinancing un16 dertaken pursuant to standard loan modification, 

17 sale, or disposition guidelines issued by the Sec18 retary of the Treasury or his designee under the 

19 Emergency Economic Stabilization Act of 2008, with 

20 respect to any such mortgage that meets all of the 

21 criteria set forth in paragraph (2)(B) to— 

22 (A) any person, based on that person’s 

23 ownership of a residential mortgage loan or any 

24 interest in a pool of residential mortgage loans 

25 or in securities that distribute payments out of 


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1 the principal, interest and other payments in 

2 loans on the pool; 

3 (B) any person who is obligated pursuant 

4 to a derivatives instrument to make payments 

5 determined in reference to any loan or any in6 terest referred to in subparagraph (A); or 

7 (C) any person that insures any loan or 

8 any interest referred to in subparagraph (A) 

9 under any law or regulation of the United 

10 States or any law or regulation of any State or 

11 political subdivision of any State. 

12 (2) ABILITY TO MODIFY MORTGAGES.— 

13 (A) ABILITY.—Notwithstanding any other 

14 provision of law, and notwithstanding any in15 vestment contract between a servicer and a 

16 securitization vehicle or investor, a servicer— 

17 (i) shall not be limited in the ability 

18 to modify mortgages, the number of mort19 gages that can be modified, the frequency 

20 of loan modifications, or the range of per21 missible modifications; and 

22 (ii) shall not be obligated to repur23 chase loans from or otherwise make pay24 ments to the securitization vehicle on ac25 count of a modification, workout, or other 


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1 loss mitigation plan for a residential mort2 gage or a class of residential mortgages 

3 that constitute a part or all of the mort4 gages in the securitization vehicle, 

5 if any mortgage so modified meets all of the cri6 teria set forth in subparagraph (B). 

7 (B) CRITERIA.—The criteria under this 

8 subparagraph with respect to a mortgage are as 

9 follows: 

10 (i) Default on the payment of such 

11 mortgage has occurred or is reasonably 

12 foreseeable. 

13 (ii) The property securing such mort14 gage is occupied by the mortgagor of such 

15 mortgage. 

16 (iii) The servicer reasonably and in 

17 good faith believes that the anticipated re18 covery on the principal outstanding obliga19 tion of the mortgage under the particular 

20 modification or workout plan or other loss 

21 mitigation action will exceed, on a net 

22 present value basis, the anticipated recov23 ery on the principal outstanding obligation 

24 of the mortgage to be realized through 

25 foreclosure. 


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1 (3) APPLICABILITY.—This subsection shall 

2 apply only with respect to modifications, workouts, 

3 and other loss mitigation plans initiated before Jan4 uary 1, 2012. 

5 (b) REPORTING.—Each servicer that engages in loan 

6 modifications or workout plans subject to the safe harbor 

7 in subsection (a) shall report to the Secretary on a regular 

8 basis regarding the extent, scope and results of the 

9 servicer’s modification activities. The Secretary shall pre10 scribe regulations specifying the form, content, and timing 

11 of such reports. 

12 (c) LEGAL COSTS.—If an unsuccessful action is 

13 brought against a servicer by any person described in sub14 paragraph (A), (B), or (C) of subsection (a)(1), such per15 son shall bear any actual legal costs of the servicer, includ16 ing reasonable attorney fees and expert witness fees, in17 curred in good faith in such action, as determined by the 

18 court. 

19 (d) DEFINITIONS.—For purposes of this section, the 

20 following definitions shall apply: 

21 (1) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of the Treasury. 

23 (2) SECURITIZATION VEHICLE.—The term 

24 ‘‘securitization vehicle’’ means a trust, corporation, 


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1 partnership, limited liability entity, special purpose 

2 entity, or other structure that— 

3 (A) is the issuer, or is created by the 

4 issuer, of mortgage pass-through certificates, 

5 participation certificates, mortgage-backed secu6 rities, or other similar securities backed by a 

7 pool of assets that includes residential mortgage 

8 loans; and 

9 (B) holds such mortgages. 

10 SEC. 6. CREDIT FOR CERTAIN HOME PURCHASES. 

11 (a) ALLOWANCE OF CREDIT.—Subpart A of part IV 

12 of subchapter A of chapter 1 of the Internal Revenue Code 

13 of 1986, as amended by this Act, is amended by inserting 

14 after section 25E the following new section: 

15 ‘‘SEC. 25F. CREDIT FOR CERTAIN HOME PURCHASES. 

16 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in17 dividual who makes an eligible purchase during the taxable 

18 year, there shall be allowed as a credit against the tax 

19 imposed by this subtitle for such taxable year an amount 

20 equal to so much of the purchase price of the residence 

21 as does not exceed $15,000. 

22 ‘‘(b) DOWNPAYMENT REQUIREMENT.—No credit 

23 shall be allowed under subsection (a) to any taxpayer with 

24 respect to the purchase of any residence unless such taxVerDate Nov 24 2008 23:58 Apr 07, 2009 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H1903.IH H1903

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1 payer makes a downpayment of not less 5 percent of the 

2 purchase price of such residence. 

3 ‘‘(c) DEFINITIONS.—For purposes of this section— 

4 ‘‘(1) ELIGIBLE PURCHASE.—The term ‘eligible 

5 purchase’ means the purchase of a residence for the 

6 taxpayer if— 

7 ‘‘(A) such residence is located in the 

8 United States, 

9 ‘‘(B) the construction of such residence 

10 began before 2009, and 

11 ‘‘(C) such purchase is made by the tax12 payer before July 1, 2010. 

13 ‘‘(2) OTHER DEFINITIONS.—The terms ‘pur14 chase’ and ‘purchase price’ have the respective 

15 meanings given such terms by section 26(c). 

16 ‘‘(d) EXCEPTIONS.—No credit shall be allowed under 

17 subsection (a) to any taxpayer for any taxable year with 

18 respect to the purchase of a residence if— 

19 ‘‘(1) credit under section 36 (relating to first20 time homebuyer credit) or 1400C (relating to first21 time homebuyer in the District of Columbia) is al22 lowed to the taxpayer (or the taxpayer’s spouse) for 

23 such taxable year or any prior taxable year, 


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1 ‘‘(2) the residence is financed by the proceeds 

2 of a qualified mortgage issue the interest on which 

3 is exempt from tax under section 103, 

4 ‘‘(3) the taxpayer is a nonresident alien indi5 vidual, or 

6 ‘‘(4) the taxpayer disposes of such residence (or 

7 such residence ceases to be a residence of the tax8 payer (or, if married, the taxpayer’s spouse)) before 

9 the close of such taxable year. 

10 ‘‘(e) LIMITATION BASED ON AMOUNT OF TAX.—In 

11 the case of a taxable year to which section 26(a)(2) does 

12 not apply, the credit allowed under subsection (a) for any 

13 taxable year shall not exceed the excess of— 

14 ‘‘(1) the sum of the regular tax liability (as de15 fined in section 26(b)) plus the tax imposed by sec16 tion 55, over 

17 ‘‘(2) the sum of the credits allowable under this 

18 subpart (other than this section and section 25D) 

19 for the taxable year. 

20 ‘‘(f) CARRYFORWARDS OF UNUSED CREDIT.— 

21 ‘‘(1) RULE FOR YEARS IN WHICH ALL PER22 SONAL CREDITS ALLOWED AGAINST REGULAR AND

23 ALTERNATIVE MINIMUM TAX.—In the case of a tax24 able year to which section 26(a)(2) applies, if the 

25 credit allowable under subsection (a) for any taxable 


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1 year exceeds the limitation imposed by section 

2 26(a)(2) for such taxable year reduced by the sum 

3 of the credits allowable under this subpart (other 

4 than this section and sections 25D and 1400C), 

5 such excess shall be carried to the succeeding tax6 able year and added to the credit allowable under 

7 subsection (a) for such taxable year. 

8 ‘‘(2) RULE FOR OTHER YEARS.—In the case of 

9 a taxable year to which section 26(a)(2) does not 

10 apply, if the credit allowable under subsection (a) for 

11 any taxable year exceeds the limitation imposed by 

12 subsection (e) for such taxable year, such excess 

13 shall be carried to the succeeding taxable year and 

14 added to the credit allowable under subsection (a) 

15 for such taxable year. 

16 ‘‘(3) LIMITATION.—No credit may be carried 

17 forward under this subsection to any taxable year 

18 following the third taxable year after the taxable 

19 year in which the credit arose. For purposes of the 

20 preceding sentence, credits shall be treated as used 

21 on a first-in first-out basis. 

22 ‘‘(g) OTHER RULES TO APPLY.— 

23 ‘‘(1) RELATED PERSONS.—Rules similar to the 

24 rules of section 26(c)(5) shall apply for purposes of 

25 this section. 


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1 ‘‘(2) MARRIED INDIVIDUALS FILING SEPARATE

2 RETURNS, ETC.—Rules similar to the rules of sub3 paragraphs (B) and (C) of section 26(b)(1) shall 

4 apply for purposes of this section. 

5 ‘‘(3) REPORTING.—Rules similar to the rules of 

6 section 26(e) shall apply for purposes of this section. 

7 ‘‘(h) RECAPTURE OF CREDIT.—Rules similar to the 

8 rules of section 26(f) shall apply for purposes of this sec9 tion, except that— 

10 ‘‘(1) paragraph (1) thereof shall be applied by 

substituting ‘331⁄3 percent’ for ‘62 11 ⁄3 percent’, and 

12 ‘‘(2) paragraph (7) thereof shall be applied by 

13 substituting ‘3 years’ for ‘15 years’.’’. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1)(A) Section 23(b)(4)(B) of such Code is 

16 amended by striking ‘‘section 25D’’ inserting ‘‘sec17 tions 25D and 25F’’. 

18 (B) Section 24(b)(3)(B) of such Code is amend19 ed by inserting ‘‘25F,’’ after ‘‘25D,’’. 

20 (C) Section 25(e)(1)(C)(ii) of such Code is 

21 amended by inserting ‘‘25F,’’ after ‘‘25D,’’. 

22 (D) Section 25B(g)(2) of such Code is amended 

23 by inserting ‘‘25F,’’ after ‘‘25D,’’. 

24 (E) Section 26(a)(1) of such Code is amended 

25 by inserting ‘‘25F,’’ after ‘‘25D,’’. 


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1 (F) Section 30(c)(2)(B)(ii) of such Code is 

2 amended by inserting ‘‘25F,’’ after ‘‘25D,’’. 

3 (G) Section 30B(g)(2)(B)(ii) of such Code is 

4 amended by inserting ‘‘25F,’’ after ‘‘25D,’’. 

5 (H) Section 30D(c)(2)(B)(ii) of such Code is 

6 amended by striking ‘‘and 25D’’ and inserting ‘‘, 

7 25D, and 25F’’. 

8 (I) Section 904(i) of such Code is amended by 

9 inserting ‘‘25F,’’ after ‘‘25B,’’. 

10 (2) Paragraph (1) of section 23(c) of such Code 

11 is amended by inserting ‘‘, 25F,’’ after ‘‘25D,’’. 

12 (3) The table of sections for subpart A of part 

13 IV of subchapter A of chapter 1 of such Code, as 

14 amended by this Act, is amended by inserting after 

15 the item relating to section 25E the following new 

16 item: 

‘‘Sec. 25F. Credit for certain home purchases.’’. 

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

18 this section shall apply to residences purchased after the 

19 date of the enactment of this Act, in taxable years ending 

20 after such date. 

21 SEC. 7. CERTAIN GAINS ON SINGLE-FAMILY RESIDENTIAL 

22 RENTAL PROPERTY EXCLUDED FROM GROSS 

23 INCOME. 

24 (a) IN GENERAL.—Part III of subchapter B of chap25 ter 1 of the Internal Revenue Code of 1986, as amended 


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1 by this Act, is amended by inserting after section 139D 

2 the following new section: 

3 ‘‘SEC. 139E. CERTAIN GAINS ON SINGLE-FAMILY RESIDEN4 TIAL RENTAL PROPERTY. 

5 ‘‘(a) IN GENERAL.—Gross income shall not include 

6 any gain from the sale or exchange of a qualified single7 family residential rental property. 

8 ‘‘(b) LIMITATION.—The amount of gain excluded 

9 from gross income under subsection (a) with respect to 

10 any sale or exchange shall not exceed $250,000. 

11 ‘‘(c) QUALIFIED SINGLE-FAMILY RESIDENTIAL

12 RENTAL PROPERTY.—For purposes of this section— 

13 ‘‘(1) IN GENERAL.—The term ‘qualified prop14 erty’ means any real property located in the United 

15 States which— 

16 ‘‘(A) was acquired by the taxpayer by pur17 chase (as defined in section 179(d)(2)) during 

18 the period beginning on the date of the enact19 ment of this section and ending on June 30, 

20 2010, 

21 ‘‘(B) was held by the taxpayer for 2 years 

22 or more, and 

23 ‘‘(C) was rented as a single dwelling unit 

24 on a regular basis during 2 of the taxable years 

25 in the 5 taxable year period ending with the 


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1 taxable year in which the property was sold or 

2 exchanged. 

3 ‘‘(2) REGULAR BASIS.—For purposes of para4 graph (1)(C), property shall not be treated as rented 

5 on a regular basis during any taxable year unless— 

6 ‘‘(A) such property is rented on the basis 

7 of months or longer periods, and 

8 ‘‘(B) such property is rented for not less 

9 than 6 months of such year. 

10 ‘‘(d) EXCEPTION FOR NONRESIDENT ALIEN INDIVID11 UALS.—No credit shall be allowed under subsection (a) to 

12 any taxpayer if such taxpayer is a nonresident alien indi13 vidual.’’. 

14 (b) CLERICAL AMENDMENT.—The table of sections 

15 for part III of subchapter B of chapter 1 of such Code, 

16 as amended by this Act, is amended by inserting after the 

17 item relating to section 139D the following new item: 

‘‘Sec. 139E. Certain gains on single-family residential rental property.’’. 

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

19 this section shall apply to property acquired after the date 

20 of the enactment of this Act. 

Æ 


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