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107TH CONGRESS

1ST SESSION H. R. 1596

To amend the Internal Revenue Code of 1986 to provide a special rule

for members of the uniformed services and the Foreign Service, and

other employees, in determining the exclusion of gain from the sale

of a principal residence.

IN THE HOUSE OF REPRESENTATIVES

APRIL 26, 2001

Mr. HOUGHTON (for himself, Mr. FOLEY, Mr. SAM JOHNSON of Texas, Mr.

SCHAFFER, Mr. RANGEL, Mr. WATKINS, Mr. JONES of North Carolina,

Mrs. THURMAN, and Mr. LEWIS of Kentucky) introduced the following

bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

a special rule for members of the uniformed services

and the Foreign Service, and other employees, in determining the exclusion of gain from the sale of a principal

residence.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SPECIAL RULE FOR MEMBERS OF UNIFORMED

2 SERVICES AND FOREIGN SERVICE, AND

3 OTHER EMPLOYEES, IN DETERMINING EX4 CLUSION OF GAIN FROM SALE OF PRINCIPAL

5 RESIDENCE.

6 (a) IN GENERAL.—Subsection (d) of section 121 of

7 the Internal Revenue Code of 1986 (relating to exclusion

8 of gain from sale of principal residence) is amended by

9 adding at the end the following new paragraphs:

10 ‘‘(9) MEMBERS OF UNIFORMED SERVICES AND

11 FOREIGN SERVICE.—

12 ‘‘(A) IN GENERAL.—The running of the 5-

13 year period described in subsection (a) shall be

14 suspended with respect to an individual during

15 any time that such individual or such individ16 ual’s spouse is serving on qualified official ex17 tended duty as a member of the uniformed

18 services or of the Foreign Service.

19 ‘‘(B) QUALIFIED OFFICIAL EXTENDED

20 DUTY.—For purposes of this paragraph—

21 ‘‘(i) IN GENERAL.—The term ‘quali22 fied official extended duty’ means any pe23 riod of extended duty as a member of the

24 uniformed services or a member of the

25 Foreign Service during which the member

26 serves at a duty station which is at least
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1 50 miles from such property or is under

2 Government orders to reside in Govern3 ment quarters.

4 ‘‘(ii) UNIFORMED SERVICES.—The

5 term ‘uniformed services’ has the meaning

6 given such term by section 101(a)(5) of

7 title 10, United States Code, as in effect

8 on the date of the enactment of this para9 graph.

10 ‘‘(iii) FOREIGN SERVICE OF THE

11 UNITED STATES.—The term ‘member of

12 the Foreign Service’ has the meaning given

13 the term ‘member of the Service’ by para14 graph (1), (2), (3), (4), or (5) of section

15 103 of the Foreign Service Act of 1980, as

16 in effect on the date of the enactment of

17 this paragraph.

18 ‘‘(iv) EXTENDED DUTY.—The term

19 ‘extended duty’ means any period of active

20 duty pursuant to a call or order to such

21 duty for a period in excess of 90 days or

22 for an indefinite period.

23 ‘‘(10) OTHER EMPLOYEES.—

24 ‘‘(A) IN GENERAL.—The running of the 5-

25 year period described in subsection (a) shall be
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1 suspended with respect to an individual during

2 any time that such individual or such individ3 ual’s spouse is serving as an employee for a pe4 riod in excess of 90 days in an assignment by

5 such employee’s employer outside the United

6 States.

7 ‘‘(B) LIMITATIONS AND SPECIAL RULES.—

8 ‘‘(i) MAXIMUM PERIOD OF SUSPEN9 SION.—The suspension under subpara10 graph (A) with respect to a principal resi11 dence shall not exceed (in the aggregate) 5

12 years.

13 ‘‘(ii) MEMBERS OF UNIFORMED SERV14 ICES AND FOREIGN SERVICE.—Subpara15 graph (A) shall not apply to an individual

16 to whom paragraph (9) applies.

17 ‘‘(iii) SELF-EMPLOYED INDIVIDUAL

18 NOT CONSIDERED AN EMPLOYEE.—For

19 purposes of this paragraph, the term ‘em20 ployee’ does not include an individual who

21 is an employee within the meaning of sec22 tion 401(c)(1) (relating to self-employed

23 individuals).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 this section shall apply to sales and exchanges after May

3 6, 1997.

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