II 

111TH CONGRESS 

1ST SESSION S. 1230 

To amend the Internal Revenue Code of 1986 to provide a Federal income 

tax credit for certain home purchases. 

IN THE SENATE OF THE UNITED STATES 

JUNE 10, 2009 

Mr. ISAKSON (for himself, Mr. LIEBERMAN, Mr. DODD, Mr. CHAMBLISS, Mr. 

ALEXANDER, Mr. RISCH, Mr. ENSIGN, Mr. BUNNING, Ms. MURKOWSKI, 

and Mr. VITTER) introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a Federal income tax credit for certain home purchases. 

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 ‘‘Home Buyer Tax 

5 Credit Act of 2009’’. 

6 SEC. 2. CREDIT FOR CERTAIN HOME PURCHASES. 

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

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


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1 of 1986 is amended by inserting after section 25D the fol2 lowing new section: 

3 ‘‘SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES. 

4 ‘‘(a) ALLOWANCE OF CREDIT.— 

5 ‘‘(1) IN GENERAL.—In the case of an individual 

6 who is a purchaser of a principal residence during 

7 the taxable year, there shall be allowed as a credit 

8 against the tax imposed by this chapter an amount 

9 equal to 10 percent of the purchase price of the resi10 dence. 

11 ‘‘(2) DOLLAR LIMITATION.—The amount of the 

12 credit allowed under paragraph (1) shall not exceed 

13 $15,000. 

14 ‘‘(3) ALLOCATION OF CREDIT AMOUNT.—At the 

15 election of the taxpayer, the amount of the credit al16 lowed under paragraph (1) (after application of 

17 paragraph (2)) may be equally divided among the 2 

18 taxable years beginning with the taxable year in 

19 which the purchase of the principal residence is 

20 made. 

21 ‘‘(b) LIMITATIONS.— 

22 ‘‘(1) DATE OF PURCHASE.—The credit allowed 

23 under subsection (a) shall be allowed only with re24 spect to purchases made— 


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1 ‘‘(A) after the date of the enactment of the 

2 Home Buyer Tax Credit Act of 2009, and 

3 ‘‘(B) on or before the date that is 1 year 

4 after such date of enactment. 

5 ‘‘(2) LIMITATION BASED ON AMOUNT OF

6 TAX.—In the case of a taxable year to which section 

7 26(a)(2) does not apply, the credit allowed under 

8 subsection (a) for any taxable year shall not exceed 

9 the excess of— 

10 ‘‘(A) the sum of the regular tax liability 

11 (as defined in section 26(b)) plus the tax im12 posed by section 55, over 

13 ‘‘(B) the sum of the credits allowable 

14 under this subpart (other than this section) for 

15 the taxable year. 

16 ‘‘(3) ONE-TIME ONLY.— 

17 ‘‘(A) IN GENERAL.—If a credit is allowed 

18 under this section in the case of any individual 

19 (and such individual’s spouse, if married) with 

20 respect to the purchase of any principal resi21 dence, no credit shall be allowed under this sec22 tion in any taxable year with respect to the pur23 chase of any other principal residence by such 

24 individual or a spouse of such individual. 


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1 ‘‘(B) JOINT PURCHASE.—In the case of a 

2 purchase of a principal residence by 2 or more 

3 unmarried individuals or by 2 married individ4 uals filing separately, no credit shall be allowed 

5 under this section if a credit under this section 

6 has been allowed to any of such individuals in 

7 any taxable year with respect to the purchase of 

8 any other principal residence. 

9 ‘‘(c) PRINCIPAL RESIDENCE.—For purposes of this 

10 section, the term ‘principal residence’ has the same mean11 ing as when used in section 121. 

12 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No credit shall 

13 be allowed under this section for any purchase for which 

14 a credit is allowed under section 36 or section 1400C. 

15 ‘‘(e) SPECIAL RULES.— 

16 ‘‘(1) JOINT PURCHASE.— 

17 ‘‘(A) MARRIED INDIVIDUALS FILING SEPA18 RATELY.—In the case of 2 married individuals 

19 filing separately, subsection (a) shall be applied 

20 to each such individual by substituting ‘$7,500’ 

21 for ‘$15,000’ in subsection (a)(1). 

22 ‘‘(B) UNMARRIED INDIVIDUALS.—If 2 or 

23 more individuals who are not married purchase 

24 a principal residence, the amount of the credit 

25 allowed under subsection (a) shall be allocated 


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1 among such individuals in such manner as the 

2 Secretary may prescribe, except that the total 

3 amount of the credits allowed to all such indi4 viduals shall not exceed $15,000. 

5 ‘‘(2) PURCHASE.—In defining the purchase of a 

6 principal residence, rules similar to the rules of 

7 paragraphs (2) and (3) of section 1400C(e) (as in 

8 effect on the date of the enactment of this section) 

9 shall apply. 

10 ‘‘(3) REPORTING REQUIREMENT.—Rules similar 

11 to the rules of section 1400C(f) (as so in effect) 

12 shall apply. 

13 ‘‘(f) RECAPTURE OF CREDIT IN THE CASE OF CER14 TAIN DISPOSITIONS.— 

15 ‘‘(1) IN GENERAL.—In the event that a tax16 payer— 

17 ‘‘(A) disposes of the principal residence 

18 with respect to which a credit was allowed 

19 under subsection (a), or 

20 ‘‘(B) fails to occupy such residence as the 

21 taxpayer’s principal residence, 

22 at any time within 24 months after the date on 

23 which the taxpayer purchased such residence, then 

24 the tax imposed by this chapter for the taxable year 

25 during which such disposition occurred or in which 


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1 the taxpayer failed to occupy the residence as a prin2 cipal residence shall be increased by the amount of 

3 such credit. 

4 ‘‘(2) EXCEPTIONS.— 

5 ‘‘(A) DEATH OF TAXPAYER.—Paragraph 

6 (1) shall not apply to any taxable year ending 

7 after the date of the taxpayer’s death. 

8 ‘‘(B) INVOLUNTARY CONVERSION.—Para9 graph (1) shall not apply in the case of a resi10 dence which is compulsorily or involuntarily 

11 converted (within the meaning of section 

12 1033(a)) if the taxpayer acquires a new prin13 cipal residence within the 2-year period begin14 ning on the date of the disposition or cessation 

15 referred to in such paragraph. Paragraph (1) 

16 shall apply to such new principal residence dur17 ing the remainder of the 24-month period de18 scribed in such paragraph as if such new prin19 cipal residence were the converted residence. 

20 ‘‘(C) TRANSFERS BETWEEN SPOUSES OR

21 INCIDENT TO DIVORCE.—In the case of a trans22 fer of a residence to which section 1041(a) ap23 plies— 

24 ‘‘(i) paragraph (1) shall not apply to 

25 such transfer, and 


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1 ‘‘(ii) in the case of taxable years end2 ing after such transfer, paragraph (1) shall 

3 apply to the transferee in the same manner 

4 as if such transferee were the transferor 

5 (and shall not apply to the transferor). 

6 ‘‘(D) RELOCATION OF MEMBERS OF THE

7 ARMED FORCES.—Paragraph (1) shall not 

8 apply in the case of a member of the Armed 

9 Forces of the United States on active duty who 

10 moves pursuant to a military order and incident 

11 to a permanent change of station. 

12 ‘‘(3) JOINT RETURNS.—In the case of a credit 

13 allowed under subsection (a) with respect to a joint 

14 return, half of such credit shall be treated as having 

15 been allowed to each individual filing such return for 

16 purposes of this subsection. 

17 ‘‘(4) RETURN REQUIREMENT.—If the tax im18 posed by this chapter for the taxable year is in19 creased under this subsection, the taxpayer shall, 

20 notwithstanding section 6012, be required to file a 

21 return with respect to the taxes imposed under this 

22 subtitle. 

23 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub24 title, if a credit is allowed under this section with respect 

25 to the purchase of any residence, the basis of such resiVerDate Nov 24 2008 22:30 Jun 11, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1230.IS S1230

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1 dence shall be reduced by the amount of the credit so al2 lowed. 

3 ‘‘(h) ELECTION TO TREAT PURCHASE IN PRIOR

4 YEAR.—In the case of a purchase of a principal residence 

5 after December 31, 2009, and on or before the date de6 scribed in subsection (b)(1)(B), a taxpayer may elect to 

7 treat such purchase as made on December 31, 2009, for 

8 purposes of this section.’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Section 24(b)(3)(B) of the Internal Revenue 

11 Code of 1986 is amended by striking ‘‘and 25B’’ 

12 and inserting ‘‘, 25B, and 25E’’. 

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

14 amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 

15 (3) Section 25B(g)(2) of such Code is amended 

16 by striking ‘‘section 23’’ and inserting ‘‘sections 23 

17 and 25E’’. 

18 (4) Section 904(i) of such Code is amended by 

19 striking ‘‘and 25B’’ and inserting ‘‘25B, and 25E’’. 

20 (5) Section 1016(a) of such Code is amended 

21 by striking ‘‘and’’ at the end of paragraph (36), by 

22 striking the period at the end of paragraph (37) and 

23 inserting ‘‘, and’’, and by adding at the end the fol24 lowing new paragraph: 


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1 ‘‘(38) to the extent provided in section 

2 25E(g).’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

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

5 of the Internal Revenue Code of 1986 is amended by in6 serting after the item relating to section 25D the following 

7 new item: 

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

8 (d) SUNSET OF CURRENT FIRST-TIME HOMEBUYER

9 CREDIT.— 

10 (1) IN GENERAL.—Subsection (h) of section 36 

11 of the Internal Revenue Code of 1986 is amended by 

12 striking ‘‘before December 1, 2009’’ and inserting 

13 ‘‘on or before the date of the enactment of the Home 

14 Buyer Tax Credit Act of 2009’’. 

15 (2) ELECTION TO TREAT PURCHASE IN PRIOR

16 YEAR.—Subsection (g) of section 36 of the Internal 

17 Revenue Code of 1986 is amended by striking ‘‘be18 fore December 1, 2009’’ and inserting ‘‘on or before 

19 the date of the enactment of the Home Buyer Tax 

20 Credit Act of 2009’’. 

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

22 this section shall apply to purchases after the date of the 

23 enactment of this Act. 

Æ 


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