II

105TH CONGRESS

2D SESSION S. 1911

To amend the Internal Revenue Code of 1986 to provide a $500

nonrefundable credit to individuals for the payment of real estate taxes.

IN THE SENATE OF THE UNITED STATES

APRIL 2, 1998

Mr. D’AMATO 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 $500 nonrefundable credit to individuals for the payment of real estate taxes.

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 ‘‘Working Middle Class

5 Tax Relief Act of 1998’’.

6 SEC. 2. NONREFUNDABLE TAX CREDIT FOR REAL ESTATE

7 TAXES ON PRINCIPAL RESIDENCE.

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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•S 1911 IS

1 1986 (relating to nonrefundable personal credits) is

2 amended by inserting after section 25A the following:

3 ‘‘SEC. 25B. REAL ESTATE TAXES ON PRINCIPAL RESIDENCE.

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

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

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

7 the lesser of—

8 ‘‘(1) the applicable dollar amount, or

9 ‘‘(2) the amount allowable as a deduction under

10 section 164 (determined without regard to sub11 section (c)(3) thereof) for State, local, and foreign

12 real property taxes paid or accrued by the taxpayer

13 on property for periods the property was owned and

14 used by the taxpayer as the taxpayer’s principal resi15 dence.

16 ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur17 poses of this section—

18 ‘‘(1) APPLICABLE DOLLAR AMOUNT.—The ap19 plicable dollar amount shall be determined in accord20 ance with the following table:

‘‘For taxable years The dollar

beginning in: amount is:

1999 ......................................................................................... $100

2000 ......................................................................................... 200

2001 ......................................................................................... 300

2002 ......................................................................................... 400

2003 and thereafter ................................................................. 500.
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1 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin2 cipal residence’ has the meaning given such term by

3 section 121, except that the period for which a

4 dwelling unit is treated as a principal residence of

5 the taxpayer shall include the 30-day period ending

6 on the first day on which it would (but for this para7 graph) be treated as the taxpayer’s principal resi8 dence.

9 ‘‘(3) JOINT RETURN REQUIRED.—Rules similar

10 to the rules of paragraphs (2), (3), and (4) of sec11 tion 21(e) shall apply.

12 ‘‘(4) OWNERSHIP AND USE.—Rules similar to

13 the rules of paragraphs (1), (2), (3), (4), and (7) of

14 section 121(d) shall apply.’’

15 (b) DENIAL OF DOUBLE BENEFIT.—Section 164(c)

16 of the Internal Revenue Code of 1986 (relating to deduc17 tion denied in case of certain taxes) is amended by adding

18 at the end the following:

19 ‘‘(3) Taxes on real property to the extent of the

20 amount of the credit allowed under section 25B.’’

21 (c) CONFORMING AMENDMENT.—The table of sec22 tions for subpart A of part IV of subchapter A of chapter

23 1 of the Internal Revenue Code of 1986 is amended by

24 inserting after the item relating to section 25A the follow25 ing:

‘‘Sec. 25B. Real estate taxes on principal residence.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1998.

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