I 

112TH CONGRESS 

1ST SESSION H. R. 1481 

To amend the Internal Revenue Code of 1986 to encourage the purchase 

of residential property by providing an exclusion from tax on certain gains. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 12, 2011 

Mr. POLIS (for himself and Mr. COFFMAN of Colorado) 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 encourage 

the purchase of residential property by providing an exclusion from tax on certain gains. 

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 ‘‘Investment Property 

5 Opportunity Act of 2011’’. 

6 SEC. 2. EXCLUSION OF CERTAIN CAPITAL GAINS ON RESI7 DENTIAL PROPERTY. 

8 (a) IN GENERAL.—Part III of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 

10 by inserting after section 139C the following new section: 


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1 ‘‘SEC. 139D. CAPITAL GAINS ON CERTAIN RESIDENTIAL 

2 PROPERTY. 

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

4 gain from the sale of real property consisting predomi5 nantly of residential property if— 

6 ‘‘(1) such property is located in a distressed 

7 housing area, 

8 ‘‘(2) such property is acquired by purchase (as 

9 defined in section 179(d)(2)) during the 18-month 

10 period beginning on the date of the enactment of 

11 this section, and 

12 ‘‘(3) such property is held for more than 3 

13 years. 

14 ‘‘(b) DISTRESSED HOUSING AREA.—For purposes of 

15 this section, the term ‘distressed housing area’ means any 

16 county which is designated by the Secretary as having, 

17 with respect to residential housing located in such coun18 ty— 

19 ‘‘(1) a mortgage foreclosure rate during 2010 

20 which was 110 percent or more of the national aver21 age of such rate, 

22 ‘‘(2) a decline during 2010 in the average fair 

23 market value of such housing of at least 20 percent, 

24 or 

25 ‘‘(3) more than 50 percent of the loans which 

26 are secured by such housing as having a loan to 


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1 value ratio of greater than 80 percent (determined 

2 as of the end of 2010). 

3 ‘‘(c) EXCEPTION FOR SALES BETWEEN RELATED

4 PERSONS.— 

5 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

6 apply to any sale between related persons. 

7 ‘‘(2) RELATED PERSONS.—For purposes of this 

8 subsection, a person shall be treated as related to 

9 another person if the relationship between such per10 sons would result in a disallowance of losses under 

11 section 267 or 707(b).’’. 

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

13 for part III of subchapter B of chapter 1 of such Code 

14 is amended by inserting after the item relating to section 

15 139C the following new item: 

‘‘Sec. 139D. Capital gains on certain residential property.’’. 

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

17 this section shall apply to property purchased after the 

18 date of the enactment of this section. 

Æ 


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