I 

110TH CONGRESS 

2D SESSION H. R. 5643 

To amend the Internal Revenue Code of 1986 to allow a refundable credit 

against income tax for the purchase of a principal residence by a firsttime homebuyer. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2008 

Mr. ALLEN (for himself, Mr. BURTON of Indiana, Mr. CARNAHAN, Ms. GIFFORDS, Mr. DOYLE, Mr. DAVIS of Illinois, and Ms. BORDALLO) 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 allow a 

refundable credit against income tax for the purchase 

of a principal residence by a first-time homebuyer. 

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 ‘‘First-Time Home5 buyers’ Tax Credit Act of 2008’’. 


hsrobinson on PROD1PC76 with BILLS
2 

•HR 5643 IH

1 SEC. 2. REFUNDABLE CREDIT FOR FIRST-TIME HOME2 BUYERS. 

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

5 1986 (relating to refundable credits) is amended by redes6 ignating section 36 as section 37 and by inserting after 

7 section 35 the following new section: 

8 ‘‘SEC. 36. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST9 TIME HOMEBUYER. 

10 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in11 dividual who is a first-time homebuyer of a principal resi12 dence in the United States during any taxable year, there 

13 shall be allowed as a credit against the tax imposed by 

14 this subtitle for the taxable year an amount equal to 10 

15 percent of the purchase price of the residence. 

16 ‘‘(b) LIMITATIONS.— 

17 ‘‘(1) MAXIMUM DOLLAR AMOUNT.— 

18 ‘‘(A) IN GENERAL.—The credit allowed 

19 under subsection (a) shall not exceed the excess 

20 (if any) of— 

21 ‘‘(i) $3,000 (2 times such amount in 

22 the case of a joint return), over 

23 ‘‘(ii) the credit transfer amount deter24 mined under subsection (c) with respect to 

25 the purchase to which subsection (a) ap26 plies. 


hsrobinson on PROD1PC76 with BILLS
3 

•HR 5643 IH

1 ‘‘(B) INFLATION ADJUSTMENT.—In the 

2 case of any taxable year beginning after Decem3 ber 31, 2008, the $3,000 amount under sub4 paragraph (A) shall be increased by an amount 

5 equal to $3,000, multiplied by the cost-of-living 

6 adjustment determined under section 1(f)(3) for 

7 the calendar year in which the taxable year be8 gins by substituting ‘2007’ for ‘1992’ in sub9 paragraph (B) thereof. If the $3,000 amount as 

10 adjusted under the preceding sentence is not a 

11 multiple of $10, such amount shall be rounded 

12 to the nearest multiple of $10. 

13 ‘‘(2) TAXABLE INCOME LIMITATION.— 

14 ‘‘(A) IN GENERAL.—If the taxable income 

15 of the taxpayer for any taxable year exceeds the 

16 maximum taxable income in the table under 

17 subsection (a), (b), (c), or (d) of section 1, 

18 whichever is applicable, to which the 25 percent 

19 rate applies, the dollar amounts in effect under 

20 paragraph (1)(A)(i) for such taxpayer for the 

21 following taxable year shall be reduced (but not 

22 below zero) by the amount of the excess. 

23 ‘‘(B) CHANGE IN RETURN STATUS.—In the 

24 case of married individuals filing a joint return 

25 for any taxable year who did not file such a 


hsrobinson on PROD1PC76 with BILLS
4 

•HR 5643 IH

1 joint return for the preceding taxable year, sub2 paragraph (A) shall be applied by reference to 

3 the highest taxable income of either such indi4 vidual for the preceding taxable year. 

5 ‘‘(c) TRANSFER OF CREDIT.— 

6 ‘‘(1) IN GENERAL.—A taxpayer may transfer 

7 all or a portion of the credit allowable under sub8 section (a) to 1 or more persons as payment of any 

9 liability of the taxpayer arising out of— 

10 ‘‘(A) the downpayment of any portion of 

11 the purchase price of the principal residence, 

12 and 

13 ‘‘(B) closing costs in connection with the 

14 purchase (including any points or other fees in15 curred in financing the purchase). 

16 ‘‘(2) CREDIT TRANSFER MECHANISM.— 

17 ‘‘(A) IN GENERAL.—Not less than 180 

18 days after the date of the enactment of this sec19 tion, the Secretary shall establish and imple20 ment a credit transfer mechanism for purposes 

21 of paragraph (1). Such mechanism shall require 

22 the Secretary to— 

23 ‘‘(i) certify that the taxpayer is eligi24 ble to receive the credit provided by this 

25 section with respect to the purchase of a 


hsrobinson on PROD1PC76 with BILLS
5 

•HR 5643 IH

1 principal residence and that the transferee 

2 is eligible to receive the credit transfer, 

3 ‘‘(ii) certify that the taxpayer has not 

4 received the credit provided by this section 

5 with respect to the purchase of any other 

6 principal residence, 

7 ‘‘(iii) certify the credit transfer 

8 amount which will be paid to the trans9 feree, and 

10 ‘‘(iv) require any transferee that di11 rectly receives the credit transfer amount 

12 from the Secretary to notify the taxpayer 

13 within 14 days of the receipt of such 

14 amount. 

15 Any check, certificate, or voucher issued by the 

16 Secretary pursuant to this paragraph shall in17 clude the taxpayer identification number of the 

18 taxpayer and the address of the principal resi19 dence being purchased. 

20 ‘‘(B) TIMELY RECEIPT.—The Secretary 

21 shall issue the credit transfer amount not less 

22 than 30 days after the date of the receipt of an 

23 application for a credit transfer. 

24 ‘‘(3) PAYMENT OF INTEREST.— 


hsrobinson on PROD1PC76 with BILLS
6 

•HR 5643 IH

1 ‘‘(A) IN GENERAL.—Notwithstanding any 

2 other provision of this title, the Secretary shall 

3 pay interest on any amount which is not paid 

4 to a person during the 30-day period described 

5 in paragraph (2)(B). 

6 ‘‘(B) AMOUNT OF INTEREST.—Interest 

7 under subparagraph (A) shall be allowed and 

8 paid— 

9 ‘‘(i) from the day after the 30-day pe10 riod described in paragraph (2)(B) to the 

11 date payment is made, and 

12 ‘‘(ii) at the overpayment rate estab13 lished under section 6621. 

14 ‘‘(C) EXCEPTION.—This paragraph shall 

15 not apply to failures to make payments as a re16 sult of any natural disaster or other cir17 cumstance beyond the control of the Secretary. 

18 ‘‘(4) EFFECT ON LEGAL RIGHTS AND OBLIGA19 TIONS.—Nothing in this subsection shall be con20 strued to— 

21 ‘‘(A) require a lender to complete a loan 

22 transaction before the credit transfer amount 

23 has been transferred to the lender, or 

24 ‘‘(B) prevent a lender from altering the 

25 terms of a loan (including the rate, points, fees, 


hsrobinson on PROD1PC76 with BILLS
7 

•HR 5643 IH

1 and other costs) due to changes in market con2 ditions or other factors during the period of 

3 time between the application by the taxpayer 

4 for a credit transfer and the receipt by the 

5 lender of the credit transfer amount. 

6 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur7 poses of this section— 

8 ‘‘(1) FIRST-TIME HOMEBUYER.— 

9 ‘‘(A) IN GENERAL.—The term ‘first-time 

10 homebuyer’ has the same meaning as when 

11 used in section 72(t)(8)(D)(i). 

12 ‘‘(B) ONE-TIME ONLY.—If an individual is 

13 treated as a first-time homebuyer with respect 

14 to any principal residence, such individual may 

15 not be treated as a first-time homebuyer with 

16 respect to any other principal residence. 

17 ‘‘(C) MARRIED INDIVIDUALS FILING

18 JOINTLY.—In the case of married individuals 

19 who file a joint return, the credit under this 

20 section is allowable only if both individuals are 

21 first-time homebuyers. 

22 ‘‘(D) OTHER TAXPAYERS.—If 2 or more 

23 individuals who are not married purchase a 

24 principal residence— 


hsrobinson on PROD1PC76 with BILLS
8 

•HR 5643 IH

1 ‘‘(i) the credit under this section is al2 lowable only if each of the individuals is a 

3 first-time homebuyer, and 

4 ‘‘(ii) the amount of the credit allowed 

5 under subsection (a) shall be allocated 

6 among such individuals in such manner as 

7 the Secretary may prescribe, except that 

8 the total amount of the credits allowed to 

9 all such individuals shall not exceed the 

10 amount in effect under subsection 

11 (b)(1)(A) for individuals filing joint re12 turns. 

13 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin14 cipal residence’ has the same meaning as when used 

15 in section 121. Except as provided in regulations, an 

16 interest in a partnership, S corporation, or trust 

17 which owns an interest in a residence shall not be 

18 treated as an interest in a residence for purposes of 

19 this paragraph. 

20 ‘‘(3) PURCHASE.— 

21 ‘‘(A) IN GENERAL.—The term ‘purchase’ 

22 means any acquisition, but only if— 

23 ‘‘(i) the property is not acquired from 

24 a person whose relationship to the person 

25 acquiring it would result in the disallowVerDate Aug 31 2005 17:00 Mar 15, 2008 Jkt 069200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5643.IH H5643

hsrobinson on PROD1PC76 with BILLS
9 

•HR 5643 IH

1 ance of losses under section 267 or 707(b) 

2 (but, in applying section 267 (b) and (c) 

3 for purposes of this section, paragraph (4) 

4 of section 267(c) shall be treated as pro5 viding that the family of an individual shall 

6 include only the individual’s spouse, ances7 tors, and lineal descendants), and 

8 ‘‘(ii) the basis of the property in the 

9 hands of the person acquiring it is not de10 termined— 

11 ‘‘(I) in whole or in part by ref12 erence to the adjusted basis of such 

13 property in the hands of the person 

14 from whom acquired, or 

15 ‘‘(II) under section 1014(a) (re16 lating to property acquired from a de17 cedent). 

18 ‘‘(B) CONSTRUCTION.—A residence which 

19 is constructed by the taxpayer shall be treated 

20 as purchased by the taxpayer. 

21 ‘‘(4) PURCHASE PRICE.—The term ‘purchase 

22 price’ means the adjusted basis of the principal resi23 dence on the date of acquisition (within the meaning 

24 of section 72(t)(8)(D)(iii)). 


hsrobinson on PROD1PC76 with BILLS
10 

•HR 5643 IH

1 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—No credit shall 

2 be allowed under subsection (a) for any expense for which 

3 a deduction or credit is allowed under any other provision 

4 of this chapter. 

5 ‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub6 title, if a credit is allowed under this section with respect 

7 to the purchase of any residence, the basis of such resi8 dence shall be reduced by the amount of the credit so al9 lowed. 

10 ‘‘(g) PROPERTY TO WHICH SECTION APPLIES.— 

11 ‘‘(1) IN GENERAL.—The provisions of this sec12 tion apply to a principal residence if— 

13 ‘‘(A) the taxpayer purchases the residence 

14 on or after January 1, 2008, and before Janu15 ary 1, 2013, or 

16 ‘‘(B) the taxpayer enters into, on or after 

17 January 1, 2008, and before January 1, 2013, 

18 a binding contract to purchase the residence, 

19 and purchases and occupies the residence before 

20 July 1, 2014.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Subsection (a) of section 1016 of the Inter23 nal Revenue Code of 1986 (relating to general rule 

24 for adjustments to basis) is amended by striking 

25 ‘‘and’’ at the end of paragraph (36), by striking the 


hsrobinson on PROD1PC76 with BILLS
11 

•HR 5643 IH

1 period at the end of paragraph (37) and inserting ‘‘, 

2 and’’, and by adding at the end the following new 

3 paragraph: 

4 ‘‘(38) in the case of a residence with respect to 

5 which a credit was allowed under section 36, to the 

6 extent provided in section 36(f).’’. 

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

8 States Code, is amended by inserting ‘‘or 36’’ after 

9 ‘‘section 35’’. 

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

11 for subpart C of part IV of subchapter A of chapter 1 

12 of the Internal Revenue Code of 1986 is amended by strik13 ing the item relating to section 36 and inserting the fol14 lowing new items: 

‘‘Sec. 36. Purchase of principal residence by first-time homebuyer. 

‘‘Sec. 37. Overpayments of tax.’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2007. 

Æ 


hsrobinson on PROD1PC76 with BILLS