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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5720 Introduced in House (IH)]

110th CONGRESS
  2d Session
                                H. R. 5720

 To amend the Internal Revenue Code of 1986 to provide assistance for 
                                housing.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 8, 2008

   Mr. Rangel (for himself, Mr. McDermott, Mr. Lewis of Georgia, Mr. 
 Pomeroy, Mr. Thompson of California, Mr. Emanuel, Mr. Blumenauer, Ms. 
    Berkley, Mr. Crowley, Mr. Ellison, Ms. Giffords, Mr. Johnson of 
 Georgia, Mr. Mahoney of Florida, Mr. Rodriguez, Ms. Shea-Porter, Mr. 
  Sires, Mr. Welch of Vermont, and Mrs. Jones 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 assistance for 
                                housing.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Housing Assistance 
Tax Act of 2008''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; etc.
                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 Part 1--Low-Income Housing Tax Credit

Sec. 101. Temporary increase in volume cap for low-income housing tax 
                            credit.
Sec. 102. Determination of credit rate.
Sec. 103. Modifications to definition of eligible basis.
Sec. 104. Other simplification and reform of low-income housing tax 
                            incentives.
         Part 2--Modifications to Tax-Exempt Housing Bond Rules

Sec. 111. Recycling of tax-exempt debt for financing residential rental 
                            projects.
Sec. 112. Coordination of certain rules applicable to low-income 
                            housing credit and qualified residential 
                            rental project exempt facility bonds.
Part 3--Reforms Related to the Low-Income Housing Credit and Tax-Exempt 
                             Housing Bonds

Sec. 121. Hold harmless for reductions in area median gross income.
Sec. 122. Exception to annual current income determination requirement 
                            where determination not relevant.
                   Subtitle B--Single Family Housing

Sec. 131. First-time homebuyer credit.
Sec. 132. Additional standard deduction for real property taxes for 
                            nonitemizers.
                     Subtitle C--General Provisions

Sec. 141. Temporary liberalization of tax-exempt housing bond rules.
Sec. 142. Repeal of alternative minimum tax limitations on tax-exempt 
                            housing bonds, low-income housing tax 
                            credit, and rehabilitation credit.
Sec. 143. Bonds guaranteed by Federal home loan banks eligible for 
                            treatment as tax-exempt bonds.
Sec. 144. Modification of rules pertaining to FIRPTA nonforeign 
                            affidavits.
Sec. 145. Modification of definition of tax-exempt use property for 
                            purposes of the rehabilitation credit.
       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

Sec. 201. Revisions to REIT income tests.
Sec. 202. Revisions to REIT asset tests.
Sec. 203. Conforming foreign currency revisions.
                 Subtitle B--Taxable REIT Subsidiaries

Sec. 211. Conforming taxable REIT subsidiary asset test.
                        Subtitle C--Dealer Sales

Sec. 221. Holding period under safe harbor.
Sec. 222. Determining value of sales under safe harbor.
                     Subtitle D--Health Care REITs

Sec. 231. Conformity for health care facilities.
                      Subtitle E--Effective Dates

Sec. 241. Effective dates.
                     TITLE III--REVENUE PROVISIONS

Sec. 301. Broker reporting of customer's basis in securities 
                            transactions.
Sec. 302. Delay in application of worldwide allocation of interest.
Sec. 303. Time for payment of corporate estimated taxes.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART 1--LOW-INCOME HOUSING TAX CREDIT

SEC. 101. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX 
              CREDIT.

    Paragraph (3) of section 42(h) is amended by adding at the end the 
following new subparagraph:
                    ``(I) Increase in state housing credit ceiling for 
                2008 and 2009.--In the case of calendar years 2008 and 
                2009, the dollar amount in effect under subparagraph 
                (C)(ii)(I) for such calendar year (after any increase 
                under subparagraph (H)) shall be increased by $0.20.''.

SEC. 102. DETERMINATION OF CREDIT RATE.

    (a) Elimination of Distinction Between New and Existing Buildings; 
Minimum Credit Rate for Non-Federally Subsidized Buildings.--
            (1) In general.--Subsection (b) section 42 is amended to 
        read as follows:
    ``(b) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--The term `applicable percentage' means, 
        with respect to any building, the appropriate percentage 
        prescribed by the Secretary for the earlier of--
                    ``(A) the month in which such building is placed in 
                service, or
                    ``(B) at the election of the taxpayer--
                            ``(i) the month in which the taxpayer and 
                        the housing credit agency enter into an 
                        agreement with respect to such building (which 
                        is binding on such agency, the taxpayer, and 
                        all successors in interest) as to the housing 
                        credit dollar amount to be allocated to such 
                        building, or
                            ``(ii) in the case of any building to which 
                        subsection (h)(4)(B) applies, the month in 
                        which the tax-exempt obligations are issued.
        A month may be elected under clause (ii) only if the election 
        is made not later than the 5th day after the close of such 
        month. Such an election, once made, shall be irrevocable.
            ``(2) Method of prescribing percentages.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the percentages prescribed by the Secretary for any 
                month shall be--
                            ``(i) in the case of any building which is 
                        not federally subsidized for the taxable year, 
                        the greater of--
                                    ``(I) 9 percent, or
                                    ``(II) the percentage which will 
                                yield over a 10-year period amounts of 
                                credit under subsection (a) which have 
                                a present value equal to 70 percent of 
                                the qualified basis of such building, 
                                and
                            ``(ii) in the case of any other building, 
                        the percentage which will yield over a 10-year 
                        period amounts of credit under subsection (a) 
                        which have a present value equal to 30 percent 
                        of the qualified basis of such building.
                    ``(B) Method of discounting.--The present value 
                under subparagraph (A) shall be determined--
                            ``(i) as of the last day of the 1st year of 
                        the 10-year period referred to in subparagraph 
                        (A),
                            ``(ii) by using a discount rate equal to 72 
                        percent of the average of the annual Federal 
                        mid-term rate and the annual Federal long-term 
                        rate applicable under section 1274(d)(1) to the 
                        month applicable under subparagraph (A) and 
                        compounded annually, and
                            ``(iii) by assuming that the credit 
                        allowable under this section for any year is 
                        received on the last day of such year.
            ``(3) Cross references.--
                    ``(A) For treatment of certain rehabilitation 
                expenditures as separate buildings, see subsection (e).
                    ``(B) For determination of applicable percentage 
                for increases in qualified basis after the 1st year of 
                the credit period, see subsection (f)(3).
                    ``(C) For authority of housing credit agency to 
                limit applicable percentage and qualified basis which 
                may be taken into account under this section with 
                respect to any building, see subsection (h)(7).''.
            (2) Conforming amendments.--
                    (A) Subparagraph (B) of section 42(e)(3) is amended 
                by striking ``subsection (b)(2)(B)(ii)'' and inserting 
                ``subsection (b)(2)(A)(ii)''.
                    (B) Subparagraph (A) of section 42(i)(2) is amended 
                by striking ``new building'' and inserting 
                ``building''.
    (b) Modifications to Definition of Federally Subsidized Building.--
            (1) In general.--Subparagraph (A) of section 42(i)(2) is 
        amended by striking ``, or any below market Federal loan,''.
            (2) Conforming amendments.--
                    (A) Subparagraph (B) of section 42(i)(2) is 
                amended--
                            (i) by striking ``balance of loan or'' in 
                        the heading thereof,
                            (ii) by striking ``loan or'' in the matter 
                        preceding clause (i), and
                            (iii) by striking ``subsection (d)--'' and 
                        all that follows and inserting ``subsection (d) 
                        the proceeds of such obligation''.
                    (B) Subparagraph (C) of section 42(i)(2) is 
                amended--
                            (i) by striking ``or below market Federal 
                        loan'' in the matter preceding clause (i),
                            (ii) in clause (i)--
                                    (I) by striking ``or loan (when 
                                issued or made)'' and inserting ``(when 
                                issued)'', and
                                    (II) by striking ``the proceeds of 
                                such obligation or loan'' and inserting 
                                ``the proceeds of such obligation'', 
                                and
                            (iii) by striking ``, and such loan is 
                        repaid,'' in clause (ii).
                    (C) Paragraph (2) of section 42(i) is amended by 
                striking subparagraphs (D) and (E).
    (c) Effective Date.--The amendments made by this subsection shall 
apply to buildings placed in service after the date of the enactment of 
this Act.

SEC. 103. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

    (a) Increase in Credit for Certain State Designated Buildings.--
Subparagraph (C) of section 42(d)(5) (relating to increase in credit 
for buildings in high cost areas), before redesignation under 
subsection (d), is amended by adding at the end the following new 
clause:
                            ``(v) Buildings designated by state housing 
                        credit agency.--Any building which is 
                        designated by the State housing credit agency 
                        as requiring the increase in credit under this 
                        subparagraph in order for such building to be 
                        financially feasible as part of a qualified 
                        low-income housing project shall be treated for 
                        purposes of this subparagraph as located in a 
                        difficult development area which is designated 
                        for purposes of this subparagraph. The 
                        preceding sentence shall not apply to any 
                        building if paragraph (1) of subsection (h) 
                        does not apply to any portion of the eligible 
                        basis of such building by reason of paragraph 
                        (4) of such subsection.''.
    (b) Modification to Rehabilitation Requirements.--
            (1) In general.--Clause (ii) of section 42(e)(3)(A) is 
        amended--
                    (A) by striking ``10 percent'' in subclause (I) and 
                inserting ``20 percent'', and
                    (B) by striking ``$3,000'' in subclause (II) and 
                inserting ``$6,000''.
            (2) Inflation adjustment.--Paragraph (3) of section 42(e) 
        is amended by adding at the end the following new subparagraph:
                    ``(D) Inflation adjustment.--In the case of any 
                expenditures which are treated under paragraph (4) as 
                placed in service during any calendar year after 2009, 
                the $6,000 amount in subparagraph (A)(ii)(II) shall be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        2008' for `calendar year 1992' in subparagraph 
                        (B) thereof.
                Any increase under the preceding sentence which is not 
                a multiple of $100 shall be rounded to the nearest 
                multiple of $100.''.
            (3) Conforming amendment.--Subclause (II) of section 
        42(f)(5)(B)(ii) is amended by striking ``if subsection 
        (e)(3)(A)(ii)(II)'' and all that follows and inserting ``if the 
        dollar amount in effect under subsection (e)(3)(A)(ii)(II) were 
        two-thirds of such amount.''.
    (c) Increase in Allowable Community Service Facility Space for 
Small Projects.--Clause (ii) of section 42(d)(4)(C) (relating to 
limitation) is amended by striking ``10 percent of the eligible basis 
of the qualified low-income housing project of which it is a part. For 
purposes of'' and inserting ``the sum of--
                                    ``(I) 15 percent of so much of the 
                                eligible basis of the qualified low-
                                income housing project of which it is a 
                                part as does not exceed $5,000,000, 
                                plus
                                    ``(II) 10 percent of so much of the 
                                eligible basis of such project as is 
                                not taken into account under subclause 
                                (I).
                        For purposes of''.
    (d) Clarification of Treatment of Federal Grants.--Subparagraph (A) 
of section 42(d)(5) is amended to read as follows:
                    ``(A) Federal grants not taken into account in 
                determining eligible basis.--The eligible basis of a 
                building shall not include any costs financed directly 
                or indirectly with the proceeds of a Federally funded 
                grant.''.
    (e) Simplification of Related Party Rules.--Clause (iii) of section 
42(d)(2)(D) is amended--
            (1) by striking all that precedes subclause (II),
            (2) by redesignating subclause (II) as clause (iii) and 
        moving such clause two ems to the left, and
            (3) by striking the last sentence thereof.
    (f) Repeal of Deadwood.--
            (1) Clause (ii) of section 42(d)(2)(B) is amended by 
        striking ``the later of--'' and all that follows and inserting 
        ``the date the building was last placed in service,''.
            (2) Subparagraph (D) of section 42(d)(2) is amended by 
        striking clause (i) and by redesignating clauses (ii) and (iii) 
        as clauses (i) and (ii), respectively.
            (3) Paragraph (5) of section 42(d) is amended by striking 
        subparagraph (B) and by redesignating subparagraph (C) as 
        subparagraph (B).
    (g) Effective Date.--The amendments made by this subsection shall 
apply to buildings placed in service after the date of the enactment of 
this Act.

SEC. 104. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX 
              INCENTIVES.

    (a) Repeal Prohibition on Moderate Rehabilitation Assistance.--
Paragraph (2) of section 42(c) (defining qualified low-income building) 
is amended by striking the flush sentence at the end.
    (b) Modification of Time Limit for Incurring 10 Percent of 
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended by 
striking ``(as of the later of the date which is 6 months after the 
date that the allocation was made or the close of the calendar year in 
which the allocation is made)'' and inserting ``(as of the date which 
is 1 year after the date that the allocation was made)''.
    (c) Repeal of Bonding Requirement on Disposition of Building.--
Paragraph (6) of section 42(j) (relating to no recapture on disposition 
of building (or interest therein) where bond posted) is amended to read 
as follows:
            ``(6) No recapture on disposition of building which 
        continues in qualified use.--
                    ``(A) In general.--The increase in tax under this 
                subsection shall not apply solely by reason of the 
                disposition of a building (or an interest therein) if 
                it is reasonably expected that such building will 
                continue to be operated as a qualified low-income 
                building for the remaining compliance period with 
                respect to such building.
                    ``(B) Statute of limitations.--If a building (or an 
                interest therein) is disposed of during any taxable 
                year and there is any reduction in the qualified basis 
                of such building which results in an increase in tax 
                under this subsection for such taxable or any 
                subsequent taxable year, then--
                            ``(i) the statutory period for the 
                        assessment of any deficiency with respect to 
                        such increase in tax shall not expire before 
                        the expiration of 3 years from the date the 
                        Secretary is notified by the taxpayer (in such 
                        manner as the Secretary may prescribe) of such 
                        reduction in qualified basis, and
                            ``(ii) such deficiency may be assessed 
                        before the expiration of such 3-year period 
                        notwithstanding the provisions of any other law 
                        or rule of law which would otherwise prevent 
                        such assessment.''.
    (d) Energy Efficiency and Historic Nature Taken Into Account in 
Making Allocations.--Subparagraph (C) of section 42(m)(1) (relating to 
plans for allocation of credit among projects) is amended by striking 
``and'' at the end of clause (vii), by striking the period at the end 
of clause (viii), and by adding at the end the following new clauses:
                            ``(ix) the energy efficiency of the 
                        project, and
                            ``(x) the historic nature of the 
                        project.''.
    (e) Continued Eligibility for Students Who Received Foster Care 
Assistance.--Clause (i) of section 42(i)(3)(D) is amended by striking 
``or'' at the end of subclause (I), by redesignating subclause (II) as 
subclause (III), and by inserting after subclause (I) the following new 
subclause:
                                    ``(II) a student who was previously 
                                under the care and placement 
                                responsibility of the State agency 
                                responsible for administering a plan 
                                under part B or part E of title IV of 
                                the Social Security Act, or''.
    (f) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        buildings placed in service after the date of the enactment of 
        this Act.
            (2) Repeal of bonding requirement on disposition of 
        building.--The amendment made by subsection (c) shall apply 
        to--
                    (A) interests in buildings disposed after the date 
                of the enactment of this Act, and
                    (B) interests in buildings disposed of on or before 
                such date if--
                            (i) it is reasonably expected that such 
                        building will continue to be operated as a 
                        qualified low-income building (within the 
                        meaning of section 42 of the Internal Revenue 
                        Code of 1986) for the remaining compliance 
                        period (within the meaning of such section) 
                        with respect to such building, and
                            (ii) the taxpayer elects the application of 
                        this subparagraph with respect to such 
                        disposition.
            (3) Energy efficiency and historic nature taken into 
        account in making allocations.--The amendments made by 
        subsection (d) shall apply to allocations made after December 
        31, 2008.
            (4) Continued eligibility for students who received foster 
        care assistance.--The amendments made by subsection (e) shall 
        apply to determinations made after the date of the enactment of 
        this Act.

         PART 2--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

SEC. 111. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL 
              PROJECTS.

    (a) In General.--Subsection (i) of section 146 (relating to 
treatment of refunding issues) is amended by adding at the end the 
following new paragraph:
            ``(6) Treatment of certain residential rental project bonds 
        as refunding bonds irrespective of obligor.--
                    ``(A) In general.--If, during the 6-month period 
                beginning on the date of a repayment of a loan financed 
                by an issue 95 percent or more of the net proceeds of 
                which are used to provide projects described in section 
                142(d), such repayment is used to provide a new loan 
                for any project so described, any bond which is issued 
                to refinance such issue shall be treated as a refunding 
                issue to the extent the principal amount of such 
                refunding issue does not exceed the principal amount of 
                the bonds refunded.
                    ``(B) Limitations.--Subparagraph (A) shall apply to 
                only one refunding of the original issue and only if--
                            ``(i) the refunding issue is issued not 
                        later than 4 years after the date on which the 
                        original issue was issued,
                            ``(ii) the latest maturity date of any bond 
                        of the refunding issue is not later than 34 
                        years after the date on which the refunded bond 
                        was issued, and
                            ``(iii) the refunding issue is approved in 
                        accordance with section 147(f) before the 
                        issuance of the refunding issue.''.
    (b) Low-Income Housing Credit.--Clause (ii) of section 42(h)(4)(A) 
is amended by inserting ``or such financing is refunded as described in 
section 146(i)(6)'' before the period at the end.
    (c) Effective Date.--The amendments made by this section shall 
apply to repayments of loans received after the date of the enactment 
of this Act.

SEC. 112. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME 
              HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL PROJECT 
              EXEMPT FACILITY BONDS.

    (a) Determination of Next Available Unit.--Paragraph (3) of section 
142(d) (relating to current income determinations) is amended by adding 
at the end the following new subparagraph:
                    ``(C) Exception for projects with respect to which 
                affordable housing credit is allowed.--In the case of a 
                project with respect to which credit is allowed under 
                section 42, the second sentence of subparagraph (B) 
                shall be applied by substituting `building (within the 
                meaning of section 42)' for `project'.''.
    (b) Students.--Paragraph (2) of section 142(d) (relating to 
definitions and special rules) is amended by adding at the end the 
following new subparagraph:
                    ``(C) Students.--Rules similar to the rules of 
                42(i)(3)(D) shall apply for purposes of this 
                subsection.''.
    (c) Single-Room Occupancy Units.--Paragraph (2) of section 142(d) 
(relating to definitions and special rules), as amended by this Act, is 
further amended by adding at the end the following new subparagraph:
                    ``(D) Single-room occupancy units.--A unit shall 
                not fail to be treated as a residential unit merely 
                because such unit is a single-room occupancy unit 
                (within the meaning of section 42).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to determinations of the status of qualified residential rental 
projects for periods beginning after the date of the enactment of this 
Act, with respect to bonds issued before, on, or after such date.

PART 3--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-EXEMPT 
                             HOUSING BONDS

SEC. 121. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.

    (a) In General.--Paragraph (2) of section 142(d) is amended by 
adding at the end the following new subparagraph:
                    ``(C) Hold harmless for reductions in area median 
                gross income.--
                            ``(i) In general.--Any determination of 
                        area median gross income under subparagraph (B) 
                        with respect to any project for any calendar 
                        year after 2008 shall not be less than the area 
                        median gross income determined under such 
                        subparagraph with respect to such project for 
                        the calendar year preceding the calendar year 
                        for which such determination is made.
                            ``(ii) Special rule for certain census 
                        changes.--In the case of a HUD hold harmless 
                        impacted project, the area median gross income 
                        with respect to such project for any calendar 
                        year after 2008 (hereafter in this clause 
                        referred to as the current calendar year) shall 
                        be the greater of the amount determined without 
                        regard to this clause or the sum of--
                                    ``(I) the area median gross income 
                                determined under the HUD hold harmless 
                                policy with respect to such project for 
                                calendar year 2008, plus
                                    ``(II) any increase in the area 
                                median gross income determined under 
                                subparagraph (B) (determined without 
                                regard to the HUD hold harmless policy 
                                and this subparagraph) with respect to 
                                such project for the current calendar 
                                year over the area median gross income 
                                (as so determined) with respect to such 
                                project for calendar year 2008.
                            ``(iii) HUD hold harmless policy.--The term 
                        `HUD hold harmless policy' means the 
                        regulations under which a policy similar to the 
                        rules of clause (i) applied to prevent a change 
                        in the method of determining area median gross 
                        income from resulting in a reduction in the 
                        area median gross income determined with 
                        respect to certain projects in calendar years 
                        2007 and 2008.
                            ``(iv) HUD hold harmless impacted 
                        project.--The term `HUD hold harmless impacted 
                        project' means any project with respect to 
                        which area median gross income was determined 
                        under subparagraph (B) for calendar year 2007 
                        or 2008 if such determination would have been 
                        less but for the HUD hold harmless policy.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to determinations of area median gross income for calendar years after 
2008.

SEC. 122. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT 
              WHERE DETERMINATION NOT RELEVANT.

    (a) In General.--Subparagraph (A) of section 142(d)(3) is amended 
by adding at the end the following new sentence: ``The preceding 
sentence shall not apply with respect to any project for any year if 
during such year no residential unit in the project is occupied by a 
new resident whose income exceeds the applicable income limit.''
    (b) Effective Date.--The amendment made by this section shall apply 
to years ending after the date of the enactment of this Act.

                   Subtitle B--Single Family Housing

SEC. 131. FIRST-TIME HOMEBUYER CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual who is a 
first-time homebuyer of a principal residence in the United States 
during a taxable year, there shall be allowed as a credit against the 
tax imposed by this subtitle for such taxable year an amount equal to 
10 percent of the purchase price of the residence.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the credit allowed under subsection (a) 
                shall not exceed $7,500.
                    ``(B) Married individuals filing separately.--In 
                the case of a married individual filing a separate 
                return, subparagraph (A) shall be applied by 
                substituting `$3,750' for `$7,500'.
                    ``(C) Other individuals.--If two or more 
                individuals who are not married purchase a principal 
                residence, the amount of the credit allowed under 
                subsection (a) shall be allocated among such 
                individuals in such manner as the Secretary may 
                prescribe, except that the total amount of the credits 
                allowed to all such individuals shall not exceed 
                $7,500.
            ``(2) Limitation based on modified adjusted gross income.--
                    ``(A) In general.--The amount allowable as a credit 
                under subsection (a) (determined without regard to this 
                paragraph) for the taxable year shall be reduced (but 
                not below zero) by the amount which bears the same 
                ratio to the amount which is so allowable as--
                            ``(i) the excess (if any) of--
                                    ``(I) the taxpayer's modified 
                                adjusted gross income for such taxable 
                                year, over
                                    ``(II) $70,000 ($110,000 in the 
                                case of a joint return), bears to
                            ``(ii) $20,000.
                    ``(B) Modified adjusted gross income.--For purposes 
                of subparagraph (A), the term `modified adjusted gross 
                income' means the adjusted gross income of the taxpayer 
                for the taxable year increased by any amount excluded 
                from gross income under section 911, 931, or 933.
    ``(c) Definitions.--For purposes of this section--
            ``(1) First-time homebuyer.--The term `first-time 
        homebuyer' means any individual if such individual (and if 
        married, such individual's spouse) had no present ownership 
        interest in a principal residence during the 3-year period 
        ending on the date of the purchase of the principal residence 
        to which this section applies.
            ``(2) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
            ``(3) Purchase.--
                    ``(A) In general.--The term `purchase' means any 
                acquisition, but only if--
                            ``(i) the property is not acquired from a 
                        person related to the person acquiring it, and
                            ``(ii) the basis of the property in the 
                        hands of the person acquiring it is not 
                        determined--
                                    ``(I) in whole or in part by 
                                reference to the adjusted basis of such 
                                property in the hands of the person 
                                from whom acquired, or
                                    ``(II) under section 1014(a) 
                                (relating to property acquired from a 
                                decedent).
                    ``(B) Construction.--A residence which is 
                constructed by the taxpayer shall be treated as 
                purchased by the taxpayer on the date the taxpayer 
                first occupies such residence.
            ``(4) Purchase price.--The term `purchase price' means the 
        adjusted basis of the principal residence on the date such 
        residence is purchased.
            ``(5) Related persons.--A person shall be treated as 
        related to another person if the relationship between such 
        persons would result in the disallowance of losses under 
        section 267 or 707(b) (but, in applying section 267(b) and (c) 
        for purposes of this section, paragraph (4) of section 267(c) 
        shall be treated as providing that the family of an individual 
        shall include only his spouse, ancestors, and lineal 
        descendants).
    ``(d) Exceptions.--No credit under subsection (a) shall be allowed 
to any taxpayer for any taxable year with respect to the purchase of a 
residence if--
            ``(1) a credit under section 1400C (relating to first-time 
        homebuyer in the District of Columbia) is allowable to the 
        taxpayer (or the taxpayer's spouse) for such taxable year or 
        any prior taxable year,
            ``(2) the residence is financed by the proceeds of a 
        qualified mortgage issue the interest on which is exempt from 
        tax under section 103,
            ``(3) the taxpayer is a nonresident alien, or
            ``(4) the taxpayer disposes of such residence (or such 
        residence ceases to be the principal residence of the taxpayer 
        (and, if married, the taxpayer's spouse)) before the close of 
        such taxable year.
    ``(e) Reporting.--If the Secretary requires information reporting 
under section 6045 by a person described in subsection (e)(2) thereof 
to verify the eligibility of taxpayers for the credit allowable by this 
section, the exception provided by section 6045(e) shall not apply.
    ``(f) Recapture of Credit.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, if a credit under subsection (a) is allowed to a 
        taxpayer, the tax imposed by this chapter shall be increased by 
        6\2/3\ percent of the amount of such credit for each taxable 
        year in the recapture period.
            ``(2) Acceleration of recapture.--If a taxpayer disposes of 
        the principal residence with respect to which a credit was 
        allowed under subsection (a) (or such residence ceases to be 
        the principal residence of the taxpayer (and, if married, the 
        taxpayer's spouse)) before the end of the recapture period--
                    ``(A) the tax imposed by this chapter for the 
                taxable year of such disposition or cessation, shall be 
                increased by the excess of the amount of the credit 
                allowed over the amounts of tax imposed by paragraph 
                (1) for preceding taxable years, and
                    ``(B) paragraph (1) shall not apply with respect to 
                such credit for such taxable year or any subsequent 
                taxable year .
            ``(3) Limitation based on gain.--In the case of the sale of 
        the principal residence to a person who is not related to the 
        taxpayer, the increase in tax determined under paragraph (2) 
        shall not exceed the amount of gain (if any) on such sale. 
        Solely for purposes of the preceding sentence, the adjusted 
        basis of such residence shall be reduced by the amount of the 
        credit allowed under subsection (a) to the extent not 
        previously recaptured under paragraph (1).
            ``(4) Exceptions.--
                    ``(A) Death of taxpayer.--Paragraphs (1) and (2) 
                shall not apply to any taxable year ending after the 
                date of the taxpayer's death.
                    ``(B) Involuntary conversion.--Paragraph (2) shall 
                not apply in the case of a residence which is 
                compulsorily or involuntarily converted (within the 
                meaning of section 1033(a)) if the taxpayer acquires a 
                new principal residence during the 2-year period 
                beginning on the date of the disposition or cessation 
                referred to in paragraph (2). Paragraph (2) shall apply 
                to such new principal residence during the recapture 
                period in the same manner as if such new principal 
                residence were the converted residence.
                    ``(C) Transfers between spouses or incident to 
                divorce.--In the case of a transfer of a residence to 
                which section 1041(a) applies--
                            ``(i) paragraph (2) shall not apply to such 
                        transfer, and
                            ``(ii) in the case of taxable years ending 
                        after such transfer, paragraphs (1) and (2) 
                        shall apply to the transferee in the same 
                        manner as if such transferee were the 
                        transferor (and shall not apply to the 
                        transferor).
            ``(5) Joint returns.--In the case of a credit allowed under 
        subsection (a) with respect to a joint return, half of such 
        credit shall be treated as having been allowed to each 
        individual filing such return for purposes of this subsection.
            ``(6) Recapture period.--For purposes of this subsection, 
        the term `recapture period' means the 15 taxable years 
        beginning with the second taxable year following the taxable 
        year in which the purchase of the principal residence for which 
        a credit is allowed under subsection (a) was made.
    ``(g) Application of Section.--This section shall only apply to a 
principal residence purchased by the taxpayer after __, and before 
April 1, 2009.''.
    (b) Conforming Amendments.--
            (1) Section 26(b)(2) is amended by striking ``and'' at the 
        end of subparagraph (U), by striking the period and inserting 
        ``, and'' and the end of subparagraph (V), and by inserting 
        after subparagraph (V) the following new subparagraph:
                    ``(W) section 36(f) (relating to recapture of 
                homebuyer credit).''.
            (2) Section 6211(b)(4)(A) is amended by striking `` and 
        35,'' and inserting ``35, 36,''.
            (3) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``, 36,'' after ``section 35''.
            (4) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 is amended by redesignating the item 
        relating to section 36 as an item relating to section 37 and by 
        inserting before such item the following new item:

``Sec. 36. First-time homebuyer credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to __.

SEC. 132. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR 
              NONITEMIZERS.

    (a) In General.--Section 63(c)(1) (defining standard deduction) is 
amended by striking ``and'' at the end of subparagraph (A), by striking 
the period at the end of subparagraph (B) and inserting ``, and'', and 
by adding at the end the following new subparagraph:
                    ``(C) in the case of any taxable year beginning in 
                2008, the real property tax deduction.''.
    (b) Definition.--Section 63(c) is amended by adding at the end the 
following new paragraph:
            ``(8) Real property tax deduction.--For purposes of 
        paragraph (1), the real property tax deduction is so much of 
        the amount of State and local real property taxes (within the 
        meaning of section 164) paid or accrued by the taxpayer during 
        the taxable year which do not exceed $350 ($700 in the case of 
        a joint return).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

                     Subtitle C--General Provisions

SEC. 141. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.

    (a) Temporary Increase in Volume Cap.--
            (1) In general.--Subsection (d) of section 146 is amended 
        by adding at the end the following new paragraph:
            ``(5) Increase and set aside for housing bonds for 2008.--
                    ``(A) Increase for 2008.--In the case of calendar 
                year 2008, the State ceiling for each State shall be 
                increased by an amount equal to $10,000,000,000 
                multiplied by a fraction--
                            ``(i) the numerator of which is the 
                        population of such State, and
                            ``(ii) the denominator of which is the 
                        total population of all States.
                    ``(B) Set aside.--
                            ``(i) In general.--Any amount of the State 
                        ceiling for any State which is attributable to 
                        an increase under this paragraph shall be 
                        allocated solely for one or more qualified 
                        housing issues.
                            ``(ii) Qualified housing issue.--For 
                        purposes of this paragraph, the term `qualified 
                        housing issue' means--
                                    ``(I) an issue described in section 
                                142(a)(7) (relating to qualified 
                                residential rental projects), or
                                    ``(II) a qualified mortgage issue 
                                (determined by substituting `12-month 
                                period' for `42-month period' each 
                                place it appears in section 
                                143(a)(2)(D)(i)).''.
            (2) Carryforward of unused limitations.--Subsection (f) of 
        section 146 is amended by adding at the end the following new 
        paragraph:
            ``(6) Special rules for increased volume cap under 
        subsection (d)(5).--No amount which is attributable to the 
        increase under subsection (d)(5) may be used--
                    ``(A) for any issue other than a qualified housing 
                issue (as defined in subsection (d)(5)), or
                    ``(B) to issue any bond after calendar year 
                2010.''.
    (b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for 
Subprime Refinancing Loans.--
            (1) In general.--Section 143(k) (relating to other 
        definitions and special rules) is amended by adding at the end 
        the following new paragraph:
            ``(12) Special rules for subprime refinancings.--
                    ``(A) In general.--Notwithstanding the requirements 
                of subsection (i)(1), the proceeds of a qualified 
                mortgage issue may be used to refinance a mortgage on a 
                residence which was originally financed by the 
                mortgagor through a qualified subprime loan.
                    ``(B) Special rules.--In applying subparagraph (A) 
                to any refinancing--
                            ``(i) subsection (a)(2)(D)(i) shall be 
                        applied by substituting `12-month period' for 
                        `42-month period' each place it appears,
                            ``(ii) subsection (d) (relating to 3-year 
                        requirement) shall not apply, and
                            ``(iii) subsection (e) (relating to 
                        purchase price requirement) shall be applied by 
                        using the market value of the residence at the 
                        time of refinancing in lieu of the acquisition 
                        cost.
                    ``(C) Qualified subprime loan.--The term `qualified 
                subprime loan' means an adjustable rate single-family 
                residential mortgage loan made after December 31, 2001, 
                and before January 1, 2008, that the bond issuer 
                determines would be reasonably likely to cause 
                financial hardship to the borrower if not refinanced.
                    ``(D) Termination.--This paragraph shall not apply 
                to any bonds issued after December 31, 2010.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 142. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT 
              HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND 
              REHABILITATION CREDIT.

    (a) Tax-Exempt Interest on Certain Housing Bonds Exempted From 
Alternative Minimum Tax.--
            (1) In general.--Subparagraph (C) of section 57(a)(5) 
        (relating to specified private activity bonds) is amended by 
        redesignating clauses (iii) and (iv) as clauses (iv) and (v), 
        respectively, and by inserting after clause (ii) the following 
        new clause:
                            ``(iii) Exception for certain housing 
                        bonds.--For purposes of clause (i), the term 
                        `private activity bond' shall not include any 
                        bond issued after the date of the enactment of 
                        this clause if such bond is--
                                    ``(I) an exempt facility bond 
                                issued as part of an issue 95 percent 
                                or more of the net proceeds of which 
                                are to be used to provide qualified 
                                residential rental projects (as defined 
                                in section 142(d)),
                                    ``(II) a qualified mortgage bond 
                                (as defined in section 143(a)), or
                                    ``(III) a qualified veterans' 
                                mortgage bond (as defined in section 
                                143(b)).
                        The preceding sentence shall not apply to any 
                        refunding bond unless such preceding sentence 
                        applied to the refunded bond (or in the case of 
                        a series of refundings, the original bond).''.
            (2) No adjustment to adjusted current earnings.--
        Subparagraph (B) of section 56(g)(4) is amended by adding at 
        the end the following new clause:
                            ``(iii) Tax exempt interest on certain 
                        housing bonds.--Clause (i) shall not apply in 
                        the case of any interest on a bond to which 
                        section 57(a)(5)(C)(iii) applies.''.
    (b) Allowance of Low-Income Housing Credit Against Alternative 
Minimum Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
specified credits) is amended by redesignating clauses (ii) through 
(iv) as clauses (iii) through (v) and inserting after clause (i) the 
following new clause:
                            ``(ii) the credit determined under section 
                        42 to the extent attributable to buildings 
                        placed in service after December 31, 2007,''.
    (c) Allowance of Rehabilitation Credit Against Alternative Minimum 
Tax.--Subparagraph (B) of section 38(c)(4), as amended by subsection 
(b), is amended by striking ``and'' at the end of clause (iv), by 
redesignating clause (v) as clause (vi), and by inserting after clause 
(iv) the following new clause:
                            ``(v) the credit determined under section 
                        47 to the extent attributable to qualified 
                        rehabilitation expenditures properly taken into 
                        account for periods after December 31, 2007, 
                        and''.
    (d) Effective Date.--
            (1) Housing bonds.--The amendments made by subsection (a) 
        shall apply to bonds issued after the date of the enactment of 
        this Act.
            (2) Low income housing credit.--The amendments made by 
        subsection (b) shall apply to credits determined under section 
        42 of the Internal Revenue Code of 1986 to the extent 
        attributable to buildings placed in service after December 31, 
        2007.
            (3) Rehabilitation credit.--The amendments made by 
        subsection (c) shall apply to credits determined under section 
        47 of the Internal Revenue Code of 1986 to the extent 
        attributable to qualified rehabilitation expenditures properly 
        taken into account for periods after December 31, 2007.

SEC. 143. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR 
              TREATMENT AS TAX-EXEMPT BONDS.

    (a) In General.--Subparagraph (A) of section 149(b)(3) of the 
Internal Revenue Code of 1986 (relating to exceptions for certain 
insurance programs) is amended by striking ``or'' at the end of clause 
(ii), by striking the period at the end of clause (iii) and inserting 
``, or'' and by adding at the end the following new clause:
                            ``(iv) any guarantee by a Federal home loan 
                        bank made in connection with the original 
                        issuance of a bond during the period beginning 
                        on the date of the enactment of this Act and 
                        ending on December 31, 2010 (or a renewal or 
                        extension of a guarantee so made).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to guarantees made after the date of the enactment of this Act.

SEC. 144. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN 
              AFFIDAVITS.

    (a) In General.--Subsection (b) of section 1445 (relating to 
exemptions) is amended by adding at the end the following:
            ``(9) Alternative procedure for furnishing nonforeign 
        affidavit.--For purposes of paragraphs (2) and (7)--
                    ``(A) In general.--Paragraph (2) shall be treated 
                as applying to a transaction if, in connection with a 
                disposition of a United States real property interest--
                            ``(i) the affidavit specified in paragraph 
                        (2) is furnished to a qualified substitute, and
                            ``(ii) the qualified substitute furnishes a 
                        statement to the transferee stating, under 
                        penalty of perjury, that the qualified 
                        substitute has such affidavit in his 
                        possession.
                    ``(B) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary or appropriate to 
                carry out this paragraph.''.
    (b) Qualified Substitute.--Subsection (f) of section 1445 (relating 
to definitions) is amended by adding at the end the following new 
paragraph:
            ``(6) Qualified substitute.--The term `qualified 
        substitute' means, with respect to a disposition of a United 
        States real property interest--
                    ``(A) the person (including any attorney or title 
                company) responsible for closing the transaction, other 
                than the transferor's agent, and
                    ``(B) the transferee's agent.''.
    (c) Exemption Not To Apply if Knowledge or Notice That Affidavit or 
Statement Is False.--
            (1) In general.--Paragraph (7) of section 1445(b) (relating 
        to special rules for paragraphs (2) and (3)) is amended to read 
        as follows:
            ``(7) Special rules for paragraphs (2), (3), and (9).--
        Paragraph (2), (3), or (9) (as the case may be) shall not apply 
        to any disposition--
                    ``(A) if--
                            ``(i) the transferee or qualified 
                        substitute has actual knowledge that the 
                        affidavit referred to in such paragraph, or the 
                        statement referred to in paragraph (9)(A)(ii), 
                        is false, or
                            ``(ii) the transferee or qualified 
                        substitute receives a notice (as described in 
                        subsection (d)) from a transferor's agent, 
                        transferee's agent, or qualified substitute 
                        that such affidavit or statement is false, or
                    ``(B) if the Secretary by regulations requires the 
                transferee or qualified substitute to furnish a copy of 
                such affidavit or statement to the Secretary and the 
                transferee or qualified substitute fails to furnish a 
                copy of such affidavit or statement to the Secretary at 
                such time and in such manner as required by such 
                regulations.''.
            (2) Liability.--
                    (A) Notice.--Paragraph (1) of section 1445(d) 
                (relating to notice of false affidavit; foreign 
                corporations) is amended to read as follows:
            ``(1) Notice of false affidavit; foreign corporations.--
        If--
                    ``(A) the transferor furnishes the transferee or 
                qualified substitute an affidavit described in 
                paragraph (2) of subsection (b) or a domestic 
                corporation furnishes the transferee an affidavit 
                described in paragraph (3) of subsection (b), and
                    ``(B) in the case of--
                            ``(i) any transferor's agent--
                                    ``(I) such agent has actual 
                                knowledge that such affidavit is false, 
                                or
                                    ``(II) in the case of an affidavit 
                                described in subsection (b)(2) 
                                furnished by a corporation, such 
                                corporation is a foreign corporation, 
                                or
                            ``(ii) any transferee's agent or qualified 
                        substitute, such agent or substitute has actual 
                        knowledge that such affidavit is false,
                such agent or qualified substitute shall so notify the 
                transferee at such time and in such manner as the 
                Secretary shall require by regulations.''.
                    (B) Failure to furnish notice.--Paragraph (2) of 
                section 1445(d) (relating to failure to furnish notice) 
                is amended to read as follows:
            ``(2) Failure to furnish notice.--
                    ``(A) In general.--If any transferor's agent, 
                transferee's agent, or qualified substitute is required 
                by paragraph (1) to furnish notice, but fails to 
                furnish such notice at such time or times and in such 
                manner as may be required by regulations, such agent or 
                substitute shall have the same duty to deduct and 
                withhold that the transferee would have had if such 
                agent or substitute had complied with paragraph (1).
                    ``(B) Liability limited to amount of 
                compensation.--An agent's or substitute's liability 
                under subparagraph (A) shall be limited to the amount 
                of compensation the agent or substitute derives from 
                the transaction.''.
                    (C) Conforming amendment.--The heading for section 
                1445(d) is amended by striking ``or Transferee's 
                Agents'' and inserting ``, Transferee's Agents, or 
                Qualified Substitutes''.
    (d) Effective Date.--The amendments made by this section shall 
apply to dispositions of United States real property interests after 
the date of the enactment of this Act.

SEC. 145. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR 
              PURPOSES OF THE REHABILITATION CREDIT.

    (a) In General.--Clause (I) of section 47(c)(2)(B)(v) is amended by 
striking ``section 168(h)'' and inserting ``section 168(h), except that 
`50 percent' shall be substituted for `35 percent' in paragraph 
(1)(B)(iii) thereof''.
    (b) Effective Date.--The amendments made by this section shall 
apply to expenditures properly taken into account for periods after 
December 31, 2007.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

SEC. 201. REVISIONS TO REIT INCOME TESTS.

    (a) Addition of Permissible Income Categories.--Section 856(c) 
(relating to limitations) is amended--
            (1) by striking ``and'' at the end of paragraph (2)(G) and 
        by inserting after paragraph (2)(H) the following new 
        subparagraphs:
                    ``(I) passive foreign exchange gains; and
                    ``(J) any other item of income or gain as 
                determined by the Secretary;'', and
            (2) by striking ``and'' at the end of paragraphs (3)(H) and 
        (3)(I) and by inserting after paragraph (3)(I) the following 
        new subparagraphs:
                    ``(J) real estate foreign exchange gains; and
                    ``(K) any other item of income or gain as 
                determined by the Secretary; and''.
    (b) Rules Regarding Foreign Currency Transactions.--Section 856 
(defining real estate investment trust) is amended by adding at the end 
the following new subsection:
    ``(n) Rules Regarding Foreign Currency Transactions.--With respect 
to any taxable year--
            ``(1) Real estate foreign exchange gains.--For purposes of 
        subsection (c)(3)(J), the term `real estate foreign exchange 
        gains' means--
                    ``(A) foreign currency gains (as defined in section 
                988(b)(1)) which are attributable to--
                            ``(i) any item described in subsection 
                        (c)(3) (other than in subparagraph (J) 
                        thereof),
                            ``(ii) the acquisition or ownership of 
                        obligations secured by mortgages on real 
                        property or on interests in real property 
                        (other than foreign currency gains attributable 
                        to any item described in clause (i)), or
                            ``(iii) becoming or being the obligor under 
                        obligations secured by mortgages on real 
                        property or on interests in real property 
                        (other than foreign currency gains attributable 
                        to any item described in clause (i)),
                    ``(B) gains described in section 987 attributable 
                to a qualified business unit (as defined by section 
                989) of the real estate investment trust, but only if 
                such qualified business unit meets the requirements 
                under--
                            ``(i) subsection (c)(3) (without regard to 
                        subparagraph (J) thereof) for the taxable year, 
                        and
                            ``(ii) subsection (c)(4)(A) at the close of 
                        each quarter that the real estate investment 
                        trust has directly or indirectly held the 
                        qualified business unit, and
                    ``(C) any other foreign currency gains as 
                determined by the Secretary.
            ``(2) Passive foreign exchange gains.--For purposes of 
        subsection (c)(2)(I), the term `passive foreign exchange gains' 
        means--
                    ``(A) real estate foreign exchange gains,
                    ``(B) foreign currency gains (as defined in section 
                988(b)(1)) which are not described in subparagraph (A) 
                and which are attributable to any item described in 
                subsection (c)(2) (other than in subparagraph (I) 
                thereof), and
                    ``(C) any other foreign currency gains as 
                determined by the Secretary.''.
    (c) Addition to REIT Hedging Rule.--Subparagraph (G) of section 
856(c)(5) is amended to read as follows:
                    ``(G) Treatment of certain hedging instruments.--
                Except to the extent as determined by the Secretary--
                            ``(i) any income of a real estate 
                        investment trust from a hedging transaction (as 
                        defined in clause (ii) or (iii) of section 
                        1221(b)(2)(A)) which is clearly identified 
                        pursuant to section 1221(a)(7), including gain 
                        from the sale or disposition of such a 
                        transaction, shall not constitute gross income 
                        under paragraphs (2) and (3) to the extent that 
                        the transaction hedges any indebtedness 
                        incurred or to be incurred by the trust to 
                        acquire or carry real estate assets, and
                            ``(ii) any income of a real estate 
                        investment trust from a transaction entered 
                        into by the trust primarily to manage risk of 
                        currency fluctuations with respect to any item 
                        described in paragraph (2) or (3), including 
                        gain from the termination of such a 
                        transaction, shall not constitute gross income 
                        under paragraphs (2) and (3), but only if such 
                        transaction is clearly identified as such 
                        before the close of the day on which it was 
                        acquired, originated, or entered into (or such 
                        other time as the Secretary may prescribe).''.
    (d) Authority To Exclude Items of Income From REIT Income Tests.--
Section 856(c)(5) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Secretarial authority to exclude other items 
                of income.--The Secretary is authorized to determine 
                whether any item of income or gain which does not 
                otherwise qualify under paragraph (2) or (3) may be 
                considered as not constituting gross income solely for 
                purposes of this part.''.

SEC. 202. REVISIONS TO REIT ASSET TESTS.

    (a) Clarification of Valuation Test.--The first sentence in the 
matter following section 856(c)(4)(B)(iii)(III) is amended by inserting 
``(including a discrepancy caused solely by the change in the foreign 
currency exchange rate used to value a foreign asset)'' after ``such 
requirements''.
    (b) Clarification of Permissible Asset Category.--Section 
856(c)(5), as amended by section 301(d), is amended by adding at the 
end the following new subparagraph:
                    ``(I) Cash.--The term `cash' includes foreign 
                currency if the real estate investment trust or its 
                qualified business unit (as defined in section 989) 
                uses such foreign currency as its functional currency 
                (as defined in section 985(b)).''.

SEC. 203. CONFORMING FOREIGN CURRENCY REVISIONS.

    (a) Net Income From Foreclosure Property.--Clause (i) of section 
857(b)(4)(B) is amended to read as follows:
                            ``(i) gain (including any foreign currency 
                        gain, as defined in section 988(b)(1)) from the 
                        sale or other disposition of foreclosure 
                        property described in section 1221(a)(1) and 
                        the gross income for the taxable year derived 
                        from foreclosure property (as defined in 
                        section 856(e)), but only to the extent such 
                        gross income is not described in (or, in the 
                        case of foreign currency gain, not attributable 
                        to gross income described in) section 856(c)(3) 
                        other than subparagraph (F) thereof, over''.
    (b) Net Income From Prohibited Transactions.--Clause (i) of section 
857(b)(6)(B) is amended to read as follows:
                            ``(i) the term `net income derived from 
                        prohibited transactions' means the excess of 
                        the gain (including any foreign currency gain, 
                        as defined in section 988(b)(1)) from 
                        prohibited transactions over the deductions 
                        (including any foreign currency loss, as 
                        defined in section 988(b)(2)) allowed by this 
                        chapter which are directly connected with 
                        prohibited transactions;''.

                 Subtitle B--Taxable REIT Subsidiaries

SEC. 211. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

    Section 856(c)(4)(B)(ii) is amended by striking ``20 percent'' and 
inserting ``25 percent''.

                        Subtitle C--Dealer Sales

SEC. 221. HOLDING PERIOD UNDER SAFE HARBOR.

    Section 857(b)(6) (relating to income from prohibited transactions) 
is amended--
            (1) by striking ``4 years'' in subparagraphs (C)(i), 
        (C)(iv), and (D)(i) and inserting ``2 years'',
            (2) by striking ``4-year period'' in subparagraphs (C)(ii), 
        (D)(ii), and (D)(iii) and inserting ``2-year period'', and
            (3) by striking ``real estate asset''and all that follows 
        through ``if'' in the matter preceding clause (i) of 
        subparagraphs (C) and (D), respectively, and inserting ``real 
        estate asset (as defined in section 856(c)(5)(B)) and which is 
        described in section 1221(a)(1) if''.

SEC. 222. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

    Section 857(b)(6) is amended--
            (1) by striking the semicolon at the end of subparagraph 
        (C)(iii) and inserting ``, or (III) the fair market value of 
        property (other than sales of foreclosure property or sales to 
        which section 1033 applies) sold during the taxable year does 
        not exceed 10 percent of the fair market value of all of the 
        assets of the trust as of the beginning of the taxable year;'', 
        and
            (2) by adding ``or'' at the end of subclause (II) of 
        subparagraph (D)(iv) and by adding at the end of such 
        subparagraph the following new subclause:
                            ``(III) the fair market value of property 
                        (other than sales of foreclosure property or 
                        sales to which section 1033 applies) sold 
                        during the taxable year does not exceed 10 
                        percent of the fair market value of all of the 
                        assets of the trust as of the beginning of the 
                        taxable year,''.

                     Subtitle D--Health Care REITs

SEC. 231. CONFORMITY FOR HEALTH CARE FACILITIES.

    (a) Related Party Rentals.--Subparagraph (B) of section 856(d)(8) 
(relating to special rule for taxable REIT subsidiaries) is amended to 
read as follows:
                    ``(B) Exception for certain lodging facilities and 
                health care property.--The requirements of this 
                subparagraph are met with respect to an interest in 
                real property which is a qualified lodging facility or 
                a qualified health care property (as defined in 
                subsection (e)(6)(D)(i)) leased by the trust to a 
                taxable REIT subsidiary of the trust if the property is 
                operated on behalf of such subsidiary by a person who 
                is an eligible independent contractor. For purposes of 
                this section, a taxable REIT subsidiary is not 
                considered to be operating or managing a qualified 
                health care property or qualified lodging facility 
                solely because it directly or indirectly possesses a 
                license, permit or similar instrument enabling it to do 
                so.''.
    (b) Eligible Independent Contractor.--Subparagraphs (A) and (B) of 
section 856(d)(9) (relating to eligible independent contractor) are 
amended to read as follows:
                    ``(A) In general.--The term `eligible independent 
                contractor' means, with respect to any qualified 
                lodging facility or qualified health care property (as 
                defined in subsection (e)(6)(D)(i)), any independent 
                contractor if, at the time such contractor enters into 
                a management agreement or other similar service 
                contract with the taxable REIT subsidiary to operate 
                such qualified lodging facility or qualified health 
                care property, such contractor (or any related person) 
                is actively engaged in the trade or business of 
                operating qualified lodging facilities or qualified 
                health care properties, respectively, for any person 
                who is not a related person with respect to the real 
                estate investment trust or the taxable REIT subsidiary.
                    ``(B) Special rules.--Solely for purposes of this 
                paragraph and paragraph (8)(B), a person shall not fail 
                to be treated as an independent contractor with respect 
                to any qualified lodging facility or qualified health 
                care property (as so defined) by reason of the 
                following:
                            ``(i) The taxable REIT subsidiary bears the 
                        expenses for the operation of such qualified 
                        lodging facility or qualified health care 
                        property pursuant to the management agreement 
                        or other similar service contract.
                            ``(ii) The taxable REIT subsidiary receives 
                        the revenues from the operation of such 
                        qualified lodging facility or qualified health 
                        care property, net of expenses for such 
                        operation and fees payable to the operator 
                        pursuant to such agreement or contract.
                            ``(iii) The real estate investment trust 
                        receives income from such person with respect 
                        to another property that is attributable to a 
                        lease of such other property to such person 
                        that was in effect as of the later of--
                                    ``(I) January 1, 1999, or
                                    ``(II) the earliest date that any 
                                taxable REIT subsidiary of such trust 
                                entered into a management agreement or 
                                other similar service contract with 
                                such person with respect to such 
                                qualified lodging facility or qualified 
                                health care property.''.
    (c) Taxable Reit Subsidiaries.--The last sentence of section 
856(l)(3) is amended--
            (1) by inserting ``or a health care facility'' after ``a 
        lodging facility'', and
            (2) by inserting ``or health care facility'' after ``such 
        lodging facility''.

                      Subtitle E--Effective Dates

SEC. 241. EFFECTIVE DATES.

    (a) In General.--Except as otherwise provided in this section, the 
amendments made by this title shall apply to taxable years beginning 
after the date of the enactment of this Act.
    (b) REIT Income Tests.--
            (1) The amendment made by section 201(a) and (b) shall 
        apply to gains and items of income recognized after the date of 
        the enactment of this Act.
            (2) The amendment made by section 201(c) shall apply to 
        transactions entered into after the date of the enactment of 
        this Act.
            (3) The amendment made by section 201(d) shall apply after 
        the date of the enactment of this Act.
    (c) Conforming Foreign Currency Revisions.--
            (1) The amendment made by section 203(a) shall apply to 
        gains recognized after the date of the enactment of this Act.
            (2) The amendment made by section 203(b) shall apply to 
        gains and deductions recognized after the date of the enactment 
        of this Act.
    (d) Dealer Sales.--The amendments made by subtitle C shall apply to 
sales made after the date of the enactment of this Act.

                     TITLE III--REVENUE PROVISIONS

SEC. 301. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES 
              TRANSACTIONS.

    (a) In General.--
            (1) Broker reporting for securities transactions.--Section 
        6045 (relating to returns of brokers) is amended by adding at 
        the end the following new subsection:
    ``(g) Additional Information Required in the Case of Securities 
Transactions.--
            ``(1) In general.--If a broker is otherwise required to 
        make a return under subsection (a) with respect to the gross 
        proceeds of the sale of a covered security, the broker shall 
        include in such return the information described in paragraph 
        (2).
            ``(2) Additional information required.--
                    ``(A) In general.--The information required under 
                paragraph (1) to be shown on a return with respect to a 
                covered security of a customer shall include the 
                customer's adjusted basis in such security and whether 
                any gain or loss with respect to such security is long-
                term or short-term (within the meaning of section 
                1222).
                    ``(B) Determination of adjusted basis.--For 
                purposes of subparagraph (A)--
                            ``(i) In general.--The customer's adjusted 
                        basis shall be determined--
                                    ``(I) in the case of any security 
                                (other than any stock for which an 
                                average basis method is permissible 
                                under section 1012), in accordance with 
                                the first-in first-out method unless 
                                the customer notifies the broker by 
                                means of making an adequate 
                                identification of the stock sold or 
                                transferred,
                                    ``(II) in the case of any stock for 
                                which an average basis method is 
                                permissible under section 1012 and 
                                which is acquired before January 1, 
                                2012, in accordance with any acceptable 
                                method under section 1012 with respect 
                                to the account in which such interest 
                                is held, and
                                    ``(III) in the case of any stock 
                                for which an average basis method is 
                                permissible under section 1012 and 
                                which is acquired after December 31, 
                                2011, in accordance with the broker's 
                                default method unless the customer 
                                notifies the broker that he elects 
                                another acceptable method under section 
                                1012 with respect to the account in 
                                which such interest is held.
                            ``(ii) Exception for wash sales.--Except as 
                        otherwise provided by the Secretary, the 
                        customer's adjusted basis shall be determined 
                        without regard to section 1091 (relating to 
                        loss from wash sales of stock or securities) 
                        unless the transactions occur in the same 
                        account with respect to identical securities.
            ``(3) Covered security.--For purposes of this subsection--
                    ``(A) In general.--The term `covered security' 
                means any specified security acquired on or after the 
                applicable date if such security--
                            ``(i) was acquired through a transaction in 
                        the account in which such security is held, or
                            ``(ii) was transferred to such account from 
                        an account in which such security was a covered 
                        security, but only if the broker received a 
                        statement under section 6045A with respect to 
                        the transfer.
                    ``(B) Specified security.--The term `specified 
                security' means--
                            ``(i) any share of stock in a corporation,
                            ``(ii) any note, bond, debenture, or other 
                        evidence of indebtedness,
                            ``(iii) any commodity, or contract or 
                        derivative with respect to such commodity, if 
                        the Secretary determines that adjusted basis 
                        reporting is appropriate for purposes of this 
                        subsection, and
                            ``(iv) any other financial instrument with 
                        respect to which the Secretary determines that 
                        adjusted basis reporting is appropriate for 
                        purposes of this subsection.
                    ``(C) Applicable date.--The term `applicable date' 
                means--
                            ``(i) January 1, 2010, in the case of any 
                        specified security which is stock in a 
                        corporation, and
                            ``(ii) January 1, 2012, or such later date 
                        determined by the Secretary in the case of any 
                        other specified security.
            ``(4) Treatment of s corporations.--In the case of the sale 
        of a covered security acquired by an S corporation (other than 
        a financial institution) after December 31, 2011, such S 
        corporation shall be treated in the same manner as a 
        partnership for purposes of this section.
            ``(5) Special rules for short sales.--
                    ``(A) In general.--In the case of a short sale, 
                reporting under this section shall be made for the year 
                in which such sale is closed.
                    ``(B) Exception for constructive sales.--
                Subparagraph (A) shall not apply to any short sale 
                which results in a constructive sale under section 1259 
                with respect to property held in the account in which 
                the short sale is entered into.''.
            (2) Broker information required with respect to options.--
        Section 6045, as amended by subsection (a), is amended by 
        adding at the end the following new subsection:
    ``(h) Application to Options on Securities.--
            ``(1) Exercise of option.--For purposes of this section, in 
        the case of any exercise of an option on a covered security 
        where the option was granted or acquired in the same account as 
        the covered security, the amount received or paid with respect 
        to such exercise shall be treated as an adjustment to gross 
        proceeds or as an adjustment to basis, as the case may be.
            ``(2) Lapse or closing transaction.--For purposes of this 
        section, in the case of the lapse (or closing transaction (as 
        defined in section 1234(b)(2)(A))) of an option on a specified 
        security where the taxpayer is the grantor of the option, this 
        section shall apply as if the premium received for such option 
        were gross proceeds received on the date of the lapse or 
        closing transaction, and the cost (if any) of the closing 
        transaction shall be taken into account as adjusted basis. In 
        the case of an option on a specified security where the 
        taxpayer is the grantee of such option, this section shall 
        apply as if the grantee received gross proceeds of zero on the 
        date of the lapse.
            ``(3) Prospective application.--Paragraphs (1) and (2) 
        shall not apply to any option which is granted or acquired 
        before January 1, 2012.
            ``(4) Definitions.--For purposes of this subsection, the 
        terms `covered security' and `specified security' shall have 
        the meanings given such terms in subsection (g)(3).''.
            (3) Extension of period for statements sent to customers.--
                    (A) In general.--Subsection (b) of section 6045 is 
                amended by striking ``January 31'' and inserting 
                ``February 15''.
                    (B) Statements related to substitute payments.--
                Subsection (d) of section 6045 is amended--
                            (i) by striking ``at such time and'', and
                            (ii) by inserting after ``other item.'' the 
                        following new sentence: ``The written statement 
                        required under the preceding sentence shall be 
                        furnished on or before February 15 of the year 
                        following the calendar year in which the 
                        payment was made.''.
                    (C) Other statements.--Subsection (b) of section 
                6045 is amended by adding at the end the following: 
                ``In the case of a consolidated reporting statement (as 
                defined in regulations) with respect to any account 
                which includes the statement required by this 
                subsection, any statement which would otherwise be 
                required to be furnished on or before January 31 of a 
                calendar year under section 6042(c), 6049(c)(2)(A), or 
                6050N(b) with respect to any item in such account shall 
                instead be required to be furnished on or before 
                February 15 of such calendar year if furnished as part 
                of such consolidated reporting statement.''.
    (b) Determination of Basis of Certain Securities on Account by 
Account or Average Basis Method.--Section 1012 (relating to basis of 
property-cost) is amended--
            (1) by striking ``The basis of property'' and inserting the 
        following:
    ``(a) In General.--The basis of property'',
            (2) by striking ``The cost of real property'' and inserting 
        the following:
    ``(b) Special Rule for Apportioned Real Estate Taxes.--The cost of 
real property'', and
            (3) by adding at the end the following new subsections:
    ``(c) Determinations by Account.--
            ``(1) In general.--In the case of the sale, exchange, or 
        other disposition of a specified security on or after the 
        applicable date, the conventions prescribed by regulations 
        under this section shall be applied on an account by account 
        basis.
            ``(2) Application to open-end funds.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any stock in an open-end fund 
                acquired before January 1, 2010, shall be treated as a 
                separate account from any such stock acquired on or 
                after such date.
                    ``(B) Election by open-end fund for treatment as 
                single account.--If an open-end fund elects to have 
                this subparagraph apply with respect to one or more of 
                its stockholders--
                            ``(i) subparagraph (A) shall not apply with 
                        respect to any stock in such fund held by such 
                        stockholders, and
                            ``(ii) all stock in such fund which is held 
                        by such stockholders shall be treated as 
                        covered securities described in section 
                        6045(g)(3) without regard to the date of the 
                        acquisition of such stock.
                A rule similar to the rule of the preceding sentence 
                shall apply with respect to a broker holding stock in 
                an open-end fund as a nominee.
            ``(3) Definitions.--For purposes of this section--
                    ``(A) Open-end fund.--The term `open-end fund' 
                means a regulated investment company (as defined in 
                section 851) which is offering for sale or has 
                outstanding any redeemable security of which it is the 
                issuer and the shares of which are not traded on an 
                established securities exchange.
                    ``(B) Specified security; applicable date.--The 
                terms `specified security' and `applicable date' shall 
                have the meaning given such terms in section 6045(g).
    ``(d) Average Basis for Stock Acquired Pursuant to a Dividend 
Reinvestment Plan.--
            ``(1) In general.--In the case of any stock acquired after 
        December 31, 2009, in connection with a dividend reinvestment 
        plan, the basis of such stock shall be determined using one of 
        the methods which may be used for determining the basis of 
        stock in an open-end fund.
            ``(2) Separate accounts; election for treatment as single 
        account.--Rules similar to the rules of subsection (c)(2) shall 
        apply for purposes of this subsection.
            ``(3) Dividend reinvestment plan.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `dividend reinvestment 
                plan' means any arrangement under which dividends on 
                any stock are reinvested in stock identical to the 
                stock with respect to which the dividends are paid.
                    ``(B) Initial stock acquisition treated as acquired 
                in connection with plan.--Stock shall be treated as 
                acquired in connection with a dividend reinvestment 
                plan if such stock is acquired pursuant to such plan or 
                if the dividends paid on such stock are subject to such 
                plan.''.
    (c) Information by Transferors T Aid Brokers.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 is amended by inserting after section 6045 the 
        following new section:

``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF 
              COVERED SECURITIES TO BROKERS.

    ``(a) Furnishing of Information.--Every applicable person which 
transfers to a broker (as defined in section 6045(c)(1)) a security 
which is a covered security (as defined in section 6045(g)(3)) in the 
hands of such applicable person shall furnish to such broker a written 
statement in such manner and setting forth such information as the 
Secretary may by regulations prescribe for purposes of enabling such 
broker to meet the requirements of section 6045(g).
    ``(b) Applicable Person.--For purposes of subsection (a), the term 
`applicable person' means--
            ``(1) any broker (as defined in section 6045(c)(1)), and
            ``(2) any other person as provided by the Secretary in 
        regulations.
    ``(c) Time for Furnishing Statement.--Except as otherwise provided 
by the Secretary, any statement required by subsection (a) shall be 
furnished on the date of the transfer described in such subsection.''.
            (2) Assessable penalties.--Paragraph (2) of section 6724(d) 
        (defining payee statement) is amended by redesignating 
        subparagraphs (I) through (CC) as subparagraphs (J) through 
        (DD), respectively, and by inserting after subparagraph (H) the 
        following new subparagraph:
                    ``(I) section 6045A (relating to information 
                required in connection with transfers of covered 
                securities to brokers).''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61 is amended by 
        inserting after the item relating to section 6045 the following 
        new item:

``Sec. 6045A. Information required in connection with transfers of 
                            covered securities to brokers.''.
    (d) Additional Issuer Information To Aid Brokers.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of the Internal Revenue Code of 1986, as amended by 
        subsection (b), is amended by inserting after section 6045A the 
        following new section:

``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED 
              SECURITIES.

    ``(a) In General.--According to the forms or regulations prescribed 
by the Secretary, any issuer of a specified security shall make a 
return setting forth--
            ``(1) a description of any organizational action which 
        affects the basis of such specified security of such issuer,
            ``(2) the quantitative effect on the basis of such 
        specified security resulting from such action, and
            ``(3) such other information as the Secretary may 
        prescribe.
    ``(b) Time for Filing Return.--Any return required by subsection 
(a) shall be filed not later than the earlier of--
            ``(1) 45 days after the date of the action described in 
        subsection (a), or
            ``(2) January 15 of the year following the calendar year 
        during which such action occurred.
    ``(c) Statements To Be Furnished to Holders of Specified Securities 
or Their Nominees.--According to the forms or regulations prescribed by 
the Secretary, every person required to make a return under subsection 
(a) with respect to a specified security shall furnish to the nominee 
with respect to the specified security (or certificate holder if there 
is no nominee) a written statement showing--
            ``(1) the name, address, and phone number of the 
        information contact of the person required to make such return,
            ``(2) the information required to be shown on such return 
        with respect to such security, and
            ``(3) such other information as the Secretary may 
        prescribe.
The written statement required under the preceding sentence shall be 
furnished to the holder on or before January 15 of the year following 
the calendar year during which the action described in subsection (a) 
occurred.
    ``(d) Specified Security.--For purposes of this section, the term 
`specified security' has the meaning given such term by section 
6045(g)(3)(B). No return shall be required under this section with 
respect to actions described in subsection (a) with respect to a 
specified security which occur before the applicable date (as defined 
in section 6045(g)(3)(C)) with respect to such security.
    ``(e) Public Reporting in Lieu of Return.--The Secretary may waive 
the requirements under subsections (a) and (c) with respect to a 
specified security, if the person required to make the return under 
subsection (a) makes publicly available, in such form and manner as the 
Secretary determines necessary to carry out the purposes of this 
section--
            ``(1) the name, address, phone number, and email address of 
        the information contact of such person, and
            ``(2) the information described in paragraphs (1), (2), and 
        (3) of subsection (a).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code (defining information return) is amended by 
                redesignating clauses (iv) through (xix) as clauses (v) 
                through (xx), respectively, and by inserting after 
                clause (iii) the following new clause:
                            ``(iv) section 6045B(a) (relating to 
                        returns relating to actions affecting basis of 
                        specified securities),''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                (defining payee statement), as amended by subsection 
                (c)(2), is amended by redesignating subparagraphs (J) 
                through (DD) as subparagraphs (K) through (EE), 
                respectively, and by inserting after subparagraph (I) 
                the following new subparagraph:
                    ``(J) subsections (c) and (e) of section 6045B 
                (relating to returns relating to actions affecting 
                basis of specified securities).''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61 of such Code, as 
        amended by subsection (b)(3), is amended by inserting after the 
        item relating to section 6045A the following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified 
                            securities.''.
    (e) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall take 
        effect on January 1, 2010.
            (2) Extension of period for statements sent to customers.--
        The amendments made by subsection (a)(3) shall apply to 
        statements required to be furnished after December 31, 2008.

SEC. 302. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are 
each amended by striking ``December 31, 2008'' and inserting ``December 
31, 2009''.
    (b) Transitional Rule.--Subsection (f) of section 864 is amended by 
adding at the end the following new paragraph:
            ``(7) Transition.--In the case of the first taxable year to 
        which this subsection applies, the increase (if any) in the 
        amount of the interest expense allocable to sources within the 
        United States by reason of the application of this subsection 
        shall be 90 percent of the amount of such increase determined 
        without regard to this paragraph.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 303. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    (a) Repeal of Adjustment for 2012.--Subparagraph (B) of section 
401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 is 
amended by striking the percentage contained therein and inserting 
``100 percent''.
    (b) Modification of Adjustment for 2013.--The percentage under 
subparagraph (C) of section 401(1) of the Tax Increase Prevention and 
Reconciliation Act of 2005 in effect on the date of the enactment of 
this Act is increased by 13 percentage points.
                                 <all>
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