I 

113TH CONGRESS 

1ST SESSION H. R. 877 

To amend the Internal Revenue Code of 1986 to expand the incentives 

for the rehabilitation of older buildings, including owner-occupied residences. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 27, 2013 

Mr. TURNER (for himself, Mr. HOLT, Mr. CICILLINE, Mr. LANGEVIN, Mr. 

HIGGINS, Mr. KEATING, Mr. BLUMENAUER, and Mr. STIVERS) 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 expand 

the incentives for the rehabilitation of older buildings, 

including owner-occupied residences. 

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 ‘‘Historic Homeowner5 ship Revitalization Act of 2013’’. 

6 SEC. 2. HISTORIC HOME OWNERSHIP REHABILITATION 

7 CREDIT. 

8 (a) IN GENERAL.—Subpart A of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to nonrefundable personal credits) is 

2 amended by inserting after section 25D the following new 

3 section: 

4 ‘‘SEC. 25E. HISTORIC HOME OWNERSHIP REHABILITATION 

5 CREDIT. 

6 ‘‘(a) GENERAL RULE.—In the case of an individual, 

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

8 by this chapter for the taxable year an amount equal to 

9 20 percent of the qualified rehabilitation expenditures 

10 made by the taxpayer with respect to a qualified historic 

11 home. 

12 ‘‘(b) DOLLAR LIMITATION.—The credit allowed by 

13 subsection (a) with respect to any residence of a taxpayer 

14 shall not exceed $60,000 ($30,000 in the case of a married 

15 individual filing a separate return). 

16 ‘‘(c) QUALIFIED REHABILITATION EXPENDITURE.— 

17 For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified reha19 bilitation expenditure’ means any amount properly 

20 chargeable to capital account— 

21 ‘‘(A) in connection with the certified reha22 bilitation of a qualified historic home, and 

23 ‘‘(B) for property for which depreciation 

24 would be allowable under section 168 if the 


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1 qualified historic home were used in a trade or 

2 business. 

3 ‘‘(2) CERTAIN EXPENDITURES NOT IN4 CLUDED.— 

5 ‘‘(A) EXTERIOR.—Such term shall not in6 clude any expenditure in connection with the re7 habilitation of a building unless at least 5 per8 cent of the total expenditures made in the reha9 bilitation process are allocable to the rehabilita10 tion of the exterior of such building. 

11 ‘‘(B) OTHER RULES TO APPLY.—Rules 

12 similar to the rules of clauses (ii) and (iii) of 

13 section 47(c)(2)(B) shall apply. 

14 ‘‘(3) MIXED USE OR MULTIFAMILY BUILDING.— 

15 If only a portion of a building is used as the prin16 cipal residence of the taxpayer, only qualified reha17 bilitation expenditures which are properly allocable 

18 to such portion shall be taken into account under 

19 this section. 

20 ‘‘(d) CERTIFIED REHABILITATION.—For purposes of 

21 this section— 

22 ‘‘(1) IN GENERAL.—The term ‘certified reha23 bilitation’ has the meaning given such term by sec24 tion 47(c)(2)(C). 


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1 ‘‘(2) APPROVED STATE PROGRAM.—The term 

2 ‘certified rehabilitation’ includes a certification made 

3 by— 

4 ‘‘(A) a State Historic Preservation Officer 

5 who administers a State Historic Preservation 

6 Program approved by the Secretary of the Inte7 rior pursuant to section 101(b)(1) of the Na8 tional Historic Preservation Act, or 

9 ‘‘(B) a local government, certified pursuant 

10 to section 101(c)(1) of the National Historic 

11 Preservation Act and authorized by a State 

12 Historic Preservation Officer, or the Secretary 

13 of the Interior where there is no approved State 

14 program, subject to such terms and conditions 

15 as may be specified by the Secretary of the In16 terior for the rehabilitation of buildings within 

17 the jurisdiction of such officer (or local govern18 ment) for purposes of this section. 

19 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur20 poses of this section— 

21 ‘‘(1) QUALIFIED HISTORIC HOME.—The term 

22 ‘qualified historic home’ means a certified historic 

23 structure— 

24 ‘‘(A) which has been substantially rehabili25 tated, and 


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1 ‘‘(B) which (or any portion of which)— 

2 ‘‘(i) is owned by the taxpayer, and 

3 ‘‘(ii) is used (or will, within a reason4 able period, be used) by such taxpayer as 

5 his principal residence. 

6 ‘‘(2) SUBSTANTIALLY REHABILITATED.—The 

7 term ‘substantially rehabilitated’ has the meaning 

8 given such term by section 47(c)(1)(C). 

9 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin10 cipal residence’ has the same meaning as when used 

11 in section 121. 

12 ‘‘(4) CERTIFIED HISTORIC STRUCTURE.—The 

13 term ‘certified historic structure’ means any building 

14 (and its structural components) which— 

15 ‘‘(A) is listed in the National Register, or 

16 ‘‘(B) is located in a registered historic dis17 trict (as defined in section 47(c)(3)(B)) and is 

18 certified by the Secretary of the Interior as 

19 being of historic significance to the district. 

20 ‘‘(5) REHABILITATION NOT COMPLETE BEFORE

21 CERTIFICATION.—A rehabilitation shall not be treat22 ed as complete before the date of the certification re23 ferred to in subsection (d). 

24 ‘‘(6) TENANT-STOCKHOLDER IN COOPERATIVE

25 HOUSING CORPORATION.—If the taxpayer holds 


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1 stock as a tenant-stockholder (as defined in section 

2 216) in a cooperative housing corporation (as de3 fined in such section), such stockholder shall be 

4 treated as owning the house or apartment which the 

5 taxpayer is entitled to occupy as such stockholder. 

6 ‘‘(7) ALLOCATION OF EXPENDITURES RELAT7 ING TO EXTERIOR OF BUILDING CONTAINING COOP8 ERATIVE OR CONDOMINIUM UNITS.—The percentage 

9 of the total expenditures made in the rehabilitation 

10 of a building containing cooperative or condominium 

11 residential units allocated to the rehabilitation of the 

12 exterior of the building shall be attributed propor13 tionately to each cooperative or condominium resi14 dential unit in such building for which a credit 

15 under this section is claimed. 

16 ‘‘(8) CARRYBACK AND CARRYFORWARD OF

17 CREDIT UNUSED BY REASON OF LIMITATION BASED

18 ON TAX LIABILITY.— 

19 ‘‘(A) IN GENERAL.—If the credit allowable 

20 under subsection (a) for any taxable year ex21 ceeds the tax limit for such taxable year, such 

22 excess shall be a carryback to the preceding 

23 taxable year and a carryforward to each of the 

24 3 succeeding taxable years and, subject to the 

25 limitations of subparagraph (B), shall be added 


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1 to the credit allowable by subsection (a) for 

2 such preceding or succeeding taxable year, as 

3 the case may be. 

4 ‘‘(B) AMOUNT CARRIED TO EACH YEAR.— 

5 Rules similar to the rules of section 39(a)(2) 

6 shall apply for purposes of this paragraph. 

7 ‘‘(C) LIMITATION.—The amount of the un8 used credit which may be taken into account 

9 under subparagraph (A) for any taxable year 

10 shall not exceed the amount (if any) by which 

11 the tax limit for such taxable year exceeds the 

12 sum of— 

13 ‘‘(i) the credit allowable under sub14 section (a) for such taxable year deter15 mined without regard to this paragraph, 

16 and 

17 ‘‘(ii) the amounts which, by reason of 

18 this paragraph, are carried to such taxable 

19 year and are attributable to taxable years 

20 before the unused credit year. 

21 ‘‘(D) TAX LIMIT.—For purposes of this 

22 paragraph, the term ‘tax limit’ means the limi23 tation imposed by section 26(a) for the taxable 

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1 able under this subpart (other than this sec2 tion). 

3 ‘‘(9) CREDIT MAY BE ASSIGNED.—The amount 

4 of qualified rehabilitation expenditures which would 

5 (but for this paragraph) be taken into account under 

6 subsection (a) for any taxable year by any person 

7 (hereafter in this paragraph referred to as the ‘ini8 tial taxpayer’)— 

9 ‘‘(A) may be taken into account by any 

10 other person to whom such expenditures are as11 signed by the initial taxpayer, and 

12 ‘‘(B) shall not be taken to account by ini13 tial taxpayer. 

14 Any person to whom such expenditures are assigned 

15 under subparagraph (A) shall be treated for pur16 poses of this title as the taxpayer with respect to 

17 such expenditures. 

18 ‘‘(f) WHEN EXPENDITURES TAKEN INTO AC19 COUNT.—In the case of a building other than a building 

20 to which subsection (g) applies, qualified rehabilitation ex21 penditures shall be treated for purposes of this section as 

22 made— 

23 ‘‘(1) on the date the rehabilitation is completed, 

24 or 


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1 ‘‘(2) to the extent provided by the Secretary by 

2 regulation, when such expenditures are properly 

3 chargeable to capital account. 

4 Regulations under paragraph (2) shall include a rule simi5 lar to the rule under section 50(a)(2) (relating to recap6 ture if property ceases to qualify for progress expendi7 tures). 

8 ‘‘(g) ALLOWANCE OF CREDIT FOR PURCHASE OF RE9 HABILITATED HISTORIC HOME.— 

10 ‘‘(1) IN GENERAL.—In the case of a qualified 

11 purchased historic home, the taxpayer shall be treat12 ed as having made (on the date of purchase) the ex13 penditures made by the seller of such home. For 

14 purposes of the preceding sentence, expenditures 

15 made by the seller shall be deemed to be qualified 

16 rehabilitation expenditures if such expenditures, if 

17 made by the purchaser, would be qualified rehabili18 tation expenditures. 

19 ‘‘(2) QUALIFIED PURCHASED HISTORIC

20 HOME.—For purposes of this subsection, the term 

21 ‘qualified purchased historic home’ means any sub22 stantially rehabilitated certified historic structure 

23 purchased by the taxpayer if— 

24 ‘‘(A) the taxpayer is the first purchaser of 

25 such structure after the date rehabilitation is 


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1 completed, and the purchase occurs within 5 

2 years after such date, 

3 ‘‘(B) the structure (or a portion thereof) 

4 will, within a reasonable period, be the principal 

5 residence of the taxpayer, 

6 ‘‘(C) no credit was allowed to the seller 

7 under this section or section 47 with respect to 

8 such rehabilitation, and 

9 ‘‘(D) the taxpayer is furnished with such 

10 information as the Secretary determines is nec11 essary to determine the credit under this sub12 section. 

13 ‘‘(h) RECAPTURE.— 

14 ‘‘(1) IN GENERAL.—If, before the end of the 5- 

15 year period beginning on the date on which the reha16 bilitation of the building is completed (or, if sub17 section (g) applies, the date of purchase of such 

18 building by the taxpayer)— 

19 ‘‘(A) the taxpayer disposes of such tax20 payer’s interest in such building, or 

21 ‘‘(B) such building ceases to be used as the 

22 principal residence of the taxpayer or ceases to 

23 be a certified historic structure, the taxpayer’s 

24 tax imposed by this chapter for the taxable year 

25 in which such disposition or cessation occurs 


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1 shall be increased by the recapture percentage 

2 of the credit allowed under this section for all 

3 prior taxable years with respect to such reha4 bilitation. 

5 ‘‘(2) RECAPTURE PERCENTAGE.—For purposes 

6 of paragraph (1), the recapture percentage shall be 

7 determined in accordance with the table under sec8 tion 50(a)(1)(B), deeming such table to be amend9 ed— 

10 ‘‘(A) by striking ‘If the property ceases to 

11 be investment credit property within—’ and in12 serting ‘If the disposition or cessation occurs 

13 within—’, and 

14 ‘‘(B) in clause (i) by striking ‘One full year 

15 after placed in service’ and inserting ‘One full 

16 year after the taxpayer becomes entitled to the 

17 credit’. 

18 ‘‘(3) TRANSFER BETWEEN SPOUSES OR INCI19 DENT TO DIVORCE.—In the case of any transfer de20 scribed in subsection (a) of section 1041 (relating to 

21 transfers between spouses or incident to divorce)— 

22 ‘‘(A) the foregoing provisions of this sub23 section shall not apply, and 

24 ‘‘(B) the same tax treatment under this 

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1 erty shall apply to the transferee as would have 

2 applied to the transferor. 

3 ‘‘(i) BASIS ADJUSTMENTS.—For purposes of this 

4 subtitle, if a credit is allowed under this section for any 

5 expenditure with respect to any property (including any 

6 purchase under subsection (g)), the increase in the basis 

7 of such property which would (but for this subsection) re8 sult from such expenditure shall be reduced by the amount 

9 of the credit so allowed. 

10 ‘‘(j) PROCESSING FEES.—Any State may impose a 

11 fee for the processing of applications for the certification 

12 of any rehabilitation under this section provided that the 

13 amount of such fee is used only to defray expenses associ14 ated with the processing of such applications. 

15 ‘‘(k) DENIAL OF DOUBLE BENEFIT.—No credit shall 

16 be allowed under this section for any amount for which 

17 credit is allowed under section 47. 

18 ‘‘(l) REGULATIONS.—The Secretary shall prescribe 

19 such regulations as may be appropriate to carry out the 

20 purposes of this section, including regulations where less 

21 than all of a building is used as a principal residence and 

22 where more than 1 taxpayer use the same dwelling unit 

23 as their principal residence.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1)(A) Subparagraph (C) of section 25(e)(1) of 

2 such Code is amended by inserting ‘‘25E,’’ after 

3 ‘‘sections 25D,’’. 

4 (B) Section 25D(c) of such Code is amended by 

5 inserting ‘‘and section 25E’’ after ‘‘(other than this 

6 section’’. 

7 (C) Section 1400C(d) of such Code is amended 

8 by striking ‘‘section 25D’’ and inserting ‘‘sections 

9 25D and 25E’’. 

10 (2) Subsection (a) of section 1016 of such Code 

11 is amended by striking ‘‘and’’ at the end of para12 graph (36), by striking the period at the end of 

13 paragraph (37) and inserting ‘‘, and’’, and by add14 ing at the end the following new item: 

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

16 25E(i).’’. 

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

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

19 of such Code is amended by inserting after the item relat20 ing to section 25D the following new item: 

‘‘Sec. 25E. Historic home ownership rehabilitation credit.’’. 

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

22 this section shall apply with respect to rehabilitations the 

23 physical work on which begins after the date of enactment 

24 of this Act. 


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1 SEC. 3. EXPANSION OF INCENTIVES FOR BUILDING REHA2 BILITATION. 

3 (a) INCREASE IN REHABILITATION CREDIT FOR

4 BUILDINGS IN HIGH COST AREAS.—Paragraph (2) of 

5 subsection 47(c) of such Code (defining qualified rehabili6 tation expenditures) is amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(E) INCREASE IN CREDIT FOR BUILDINGS

9 IN HIGH COST AREAS.—In the case of any 

10 qualified rehabilitated building which is residen11 tial rental property (as defined in subparagraph 

12 (D)) located in a qualified census tract or dif13 ficult development area which is designated for 

14 purposes of section 42(d)(5)(C), the qualified 

15 rehabilitation expenditures taken into account 

16 under this section shall be 130 percent of such 

17 expenditures determined without regard to this 

18 subparagraph.’’. 

19 (b) REHABILITATION CREDIT MAY BE TRANS20 FERRED.— 

21 (1) IN GENERAL.—Subsection (b) of section 47 

22 of such Code (relating to when expenditures taken 

23 into account) is amended by adding at the end the 

24 following new paragraph: 

25 ‘‘(3) CREDIT MAY BE ASSIGNED.—The amount 

26 of qualified rehabilitation expenditures with respect 


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1 to property described in which would (but for this 

2 paragraph) be taken into account under subsection 

3 (a) for any taxable year by any person (hereafter in 

4 this paragraph referred to as the ‘initial tax5 payer’)— 

6 ‘‘(A) may be taken into account by any 

7 other person to whom such expenditures are as8 signed by the initial taxpayer, and 

9 ‘‘(B) shall not be taken to account by ini10 tial taxpayer. 

11 Any person to whom such expenditures are assigned 

12 under subparagraph (A) shall be treated for pur13 poses of this title as the taxpayer with respect to 

14 such expenditures.’’. 

15 (2) CONFORMING AMENDMENT.—The heading 

16 for such subsection (b) is amended by inserting ‘‘; 

17 ELIGIBILITY FOR CREDIT MAY BE ASSIGNED’’ after 

18 ‘‘ACCOUNT’’. 

19 (c) APPLICABILITY TO BUILDINGS HELD FOR

20 SALE.— 

21 (1) IN GENERAL.— 

22 (A) Clause (iv) of section 47(c)(1)(A) of 

23 such Code is amended to read as follows: 

24 ‘‘(iv) depreciation (or amortization in 

25 lieu of depreciation)— 


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1 ‘‘(I) is allowable with respect to 

2 such building, or 

3 ‘‘(II) in the case of a residential 

4 property, would be allowable with re5 spect to such building but for the 

6 building being held for sale.’’. 

7 (B) Paragraph (2) of section 47(c) of such 

8 Code is amended by adding at the end the fol9 lowing new subparagraph: 

10 ‘‘(E) SPECIAL RULE FOR CERTAIN PROP11 ERTY HELD FOR SALE.—For purposes of this 

12 paragraph, in the case of a qualified rehabili13 tated building described in paragraph 

14 (1)(A)(iv)(II), such building shall be treated as 

15 owned by the taxpayer as rental property with 

16 respect to which the straight line depreciation 

17 method is used over a recovery period deter18 mined under subsection (c) or (g) of section 

19 168.’’. 

20 (2) CONFORMING AMENDMENT.—Paragraph (4) 

21 of section 50(a) of such Code is amended by striking 

22 ‘‘or’’ at the end of subparagraph (A), but striking 

23 the period at the end of subparagraph (B) and in24 serting ‘‘, or’’, and by inserting after subparagraph 

25 (B) the following new subparagraph: 


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1 ‘‘(C) property described in section 

2 47(c)(1)(A)(iv)(II) that has not otherwise 

3 ceased to be investment property.’’. 

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

5 this section shall apply with respect to rehabilitations the 

6 physical work on which begins after the date of enactment 

7 of this Act. 

Æ 


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