I 

114TH CONGRESS 

2D SESSION H. R. 5480 

To amend the Internal Revenue Code of 1986 to provide a credit for early 

payment of principal on certain home mortgages and to reduce the 

amount which may be treated as acquisition indebtedness for purposes 

of determining the home mortgage interest deduction. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 14, 2016 

Mr. RYAN of Ohio 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 provide 

a credit for early payment of principal on certain home 

mortgages and to reduce the amount which may be treated as acquisition indebtedness for purposes of determining the home mortgage interest deduction. 

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 ‘‘Boosting Equity for 

5 the American Middle Class Act of 2016’’ or as the 

6 ‘‘BEAM Act of 2016’’. 


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1 SEC. 2. REFUNDABLE CREDIT FOR EARLY PRINCIPAL PAY2 MENTS ON CERTAIN HOME MORTGAGES. 

3 (a) IN GENERAL.—Subpart C of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by inserting after section 36B the fol6 lowing new section: 

7 ‘‘SEC. 36C. EARLY PRINCIPAL PAYMENTS ON CERTAIN 

8 HOME MORTGAGES. 

9 ‘‘(a) IN GENERAL.—In the case of an individual, 

10 there shall be allowed as a credit against the tax imposed 

11 by this subtitle for the taxable year an amount equal to 

12 50 percent of the excess home mortgage principal pay13 ments made by the taxpayer during such taxable year. 

14 ‘‘(b) ANNUAL DOLLAR LIMITATION.—The credit al15 lowed under subsection (a) with respect to any taxpayer 

16 for any taxable year shall not exceed $500. 

17 ‘‘(c) LIFETIME LIMITATION.—No credit shall be al18 lowed under subsection (a) to any taxpayer for any taxable 

19 year if credit was allowed under subsection (a) to such 

20 taxpayer for any 10 preceding taxable years. 

21 ‘‘(d) LIMITATION BASED ON MODIFIED ADJUSTED

22 GROSS INCOME.— 

23 ‘‘(1) IN GENERAL.—The amount which would 

24 (but for this paragraph and after the application of 

25 subsection (b)) be allowable as a credit under sub26 section (a) shall be reduced (but not below zero) by 


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1 the amount which bears the same ratio to the 

2 amount which would be so allowable as— 

3 ‘‘(A) the excess of— 

4 ‘‘(i) the taxpayer’s modified adjusted 

5 gross income for the taxable year, over 

6 ‘‘(ii) $125,000 (twice such amount in 

7 the case of a joint return), bears to 

8 ‘‘(B) $10,000 (twice such amount in the 

9 case of a joint return). 

10 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— 

11 The term ‘modified adjusted gross income’ means 

12 adjusted gross income increased by any amount ex13 cluded from gross income under section 911, 931, or 

14 933. 

15 ‘‘(e) EXCESS HOME MORTGAGE PRINCIPAL PAY16 MENTS.—For purposes of this subsection— 

17 ‘‘(1) IN GENERAL.—The term ‘excess home 

18 mortgage principal payments’ means, with respect to 

19 qualified home mortgage indebtedness for any tax20 able year, the excess of— 

21 ‘‘(A) the aggregate amount of principal 

22 paid by the taxpayer with respect to such in23 debtedness during such taxable year, over 

24 ‘‘(B) the aggregate amount of principal 

25 which would have been paid by the taxpayer 


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1 with respect to such indebtedness during such 

2 taxable year if the taxpayer had timely made 

3 each required payment under the terms of the 

4 indebtedness during such taxable year (and no 

5 other payments). 

6 ‘‘(2) QUALIFIED HOME MORTGAGE INDEBTED7 NESS.— 

8 ‘‘(A) IN GENERAL.—The term ‘qualified 

9 home mortgage indebtedness’ means any acqui10 sition indebtedness (as defined in section 

11 163(h)(3)(B)) if— 

12 ‘‘(i) the residence with respect to such 

13 acquisition indebtedness is the primary res14 idence (within the meaning of section 121) 

15 of the taxpayer, and 

16 ‘‘(ii) such indebtedness constitutes a 

17 traditional mortgage. 

18 ‘‘(B) TRADITIONAL MORTGAGE.—For pur19 poses of this paragraph, the term ‘traditional 

20 mortgage’ means indebtedness— 

21 ‘‘(i) the term of which is not less than 

22 15 years and not more than 30 years, and 

23 ‘‘(ii) the required payments under 

24 which are each the same amount and made 

25 in equal intervals during the term of the 


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1 indebtedness (or if any payment is re2 quired at a different interval, the amount 

3 of such payment is adjusted in the same 

4 proportion as the change in interval). 

5 ‘‘(f) RULES RELATED TO JOINT RETURNS.— 

6 ‘‘(1) NO CREDIT FOR MARRIED INDIVIDUALS

7 FILING SEPARATELY.—In the case of a married indi8 vidual, no credit shall be allowed under this section 

9 for any taxable year unless such individual files a 

10 joint return with such individual’s spouse for such 

11 taxable year. 

12 ‘‘(2) APPLICATION OF LIFETIME LIMITATION

13 WITH RESPECT TO JOINT RETURNS.—If the credit 

14 under subsection (a) is allowed with respect to a 

15 joint return for any taxable year, such credit shall 

16 be treated for purposes of applying subsection (c) as 

17 allowed to both spouses for such taxable year. For 

18 purposes of applying subsection (c) with respect to 

19 a joint return for any taxable year, the taxpayer 

20 shall be treated as having been allowed the credit 

21 under subsection (a) for 10 or more preceding tax22 able years only if both spouses have been so allowed 

23 such credits.’’. 

24 (b) REPORTING OF EXCESS HOME MORTGAGE PRIN25 CIPAL PAYMENTS.—Section 6050H(b)(2) of such Code is 


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1 amended by striking ‘‘and’’ at the end of subparagraph 

2 (C), by redesignating subparagraph (D) as subparagraph 

3 (E), and by inserting after subparagraph (C) the following 

4 new subparagraph: 

5 ‘‘(D) the amount of excess home mortgage 

6 principal payments (as defined in section 

7 36C(e)) received with respect to such mortgage 

8 during the calendar year, and’’. 

9 (c) CONFORMING AMENDMENTS.— 

10 (1) Section 6211(b)(4)(A) of such Code is 

11 amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 

12 (2) Section 1324(b)(2) of title 31, United 

13 States Code, is amended by inserting ‘‘36C,’’ after 

14 ‘‘36B,’’. 

15 (3) The table of sections for subpart C of part 

16 IV of subchapter A of chapter 1 of the Internal Rev17 enue Code of 1986 is amended by inserting after the 

18 item relating to section 36B the following new item: 

‘‘Sec. 36C. Early principal payments on certain home mortgages.’’. 

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

20 this section shall apply to taxable years ending after the 

21 date of the enactment of this Act. 

Æ 


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