I 

116TH CONGRESS 

1ST SESSION H. R. 3478 

To amend the Internal Revenue Code of 1986 to modify the low-income 

housing credit basis limitation rules in the case the acquisition of an 

existing building. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 25, 2019 

Mr. NEGUSE 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 modify 

the low-income housing credit basis limitation rules in 

the case the acquisition of an existing building. 

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 ‘‘Affordable Housing 

5 Opportunities for Utilization, Sustainment, and Expan6 sion Act of 2019’’ or the ‘‘Affordable HOUSE Act’’. 

7 SEC. 2. MODIFICATION OF PREVIOUS OWNERSHIP RULES; 

8 LIMITATION ON ACQUISITION BASIS. 

9 (a) LIMITATION ON ACQUISITION BASIS.— 


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1 (1) IN GENERAL.—Section 42(d)(2)(B)(ii) of 

2 the Internal Revenue Code of 1986 is amended by 

3 inserting ‘‘, or the taxpayer elects the application of 

4 subparagraph (C)(ii)’’ after ‘‘service’’. 

5 (2) LIMITATION.—Section 42(d)(2)(C) of such 

6 Code is amended— 

7 (A) by striking ‘‘for purposes of subpara8 graph (A), the adjusted basis’’ and inserting 

9 the following: ‘‘For purposes of subparagraph 

10 (A)— 

11 ‘‘(i) IN GENERAL.—The adjusted 

12 basis’’, and 

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

14 clauses: 

15 ‘‘(ii) BUILDINGS IN SERVICE WITHIN

16 PREVIOUS 10 YEARS.—If the period be17 tween the date of acquisition of the build18 ing by the taxpayer and the date the build19 ing was last placed in service is less than 

20 10 years, the taxpayer’s basis attributable 

21 to the acquisition of the building which is 

22 taken into account in determining the ad23 justed basis shall not exceed the sum of— 

24 ‘‘(I) the lowest amount paid for 

25 acquisition of the building by any perVerDate Sep 11 2014 02:32 Jul 03, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3478.IH H3478

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1 son during the 10 years preceding the 

2 date of the acquisition of the building 

3 by the taxpayer, adjusted as provided 

4 in clause (iii), and 

5 ‘‘(II) the value of any capital im6 provements made by the person who 

7 sells the building to the taxpayer 

8 which are reflected in such seller’s 

9 basis. 

10 ‘‘(iii) ADJUSTMENT.—With respect to 

11 a basis determination made in any taxable 

12 year, the amount described in clause (ii)(I) 

13 shall be increased by an amount equal to— 

14 ‘‘(I) such amount, multiplied by 

15 ‘‘(II) a cost-of-living adjustment, 

16 determined in the same manner as 

17 under section 1(f)(3) for the calendar 

18 year in which the taxable year begins 

19 by taking into account the acquisition 

20 year in lieu of calendar year 2016 in 

21 subparagraph (A)(ii) thereof. 

22 For purposes of the preceding sentence, 

23 the acquisition year is the calendar year in 

24 which the lowest amount referenced in 


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1 clause (ii)(I) was paid for the acquisition 

2 of the building.’’. 

3 (3) CONFORMING AMENDMENTS.—Section 

4 42(d)(2)(D)(i) of such Code is amended— 

5 (A) by striking ‘‘FOR SUBPARAGRAPH (B)’’ 

6 in the heading, and 

7 (B) by striking ‘‘subparagraph (B)’’ in the 

8 matter preceding subclause (I) and inserting 

9 ‘‘subparagraph (B)(ii) or (C)(ii)’’. 

10 (b) MODIFICATION OF PLACED IN SERVICE RULE.— 

11 Section 42(d)(2)(B)(iii) of such Code is amended to read 

12 as follows: 

13 ‘‘(iii) the building was not owned by 

14 the taxpayer or by any person related (as 

15 of the date of acquisition by the taxpayer) 

16 to the taxpayer at any time during the 5- 

17 year period ending on the date of acquisi18 tion by the taxpayer, and’’. 

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

20 this section shall apply to buildings placed in service after 

21 December 31, 2018. 

Æ 


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