II 

111TH CONGRESS 

1ST SESSION S. 312 

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

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

IN THE SENATE OF THE UNITED STATES 

JANUARY 22, 2009 

Mr. CARDIN (for himself and Mr. ENSIGN) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

refundable credit against income tax for the purchase 

of a principal residence by a first-time homebuyer. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘First-Time Home5 buyers’ Tax Credit Act of 2009’’. 

6 SEC. 2. REFUNDABLE CREDIT FOR FIRST-TIME HOME7 BUYERS. 

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


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1 1986 (relating to refundable credits) is amended by insert2 ing after section 36 the following new section: 

3 ‘‘SEC. 36A. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST4 TIME HOMEBUYER. 

5 ‘‘(a) ALLOWANCE OF CREDIT.— 

6 ‘‘(1) IN GENERAL.—In the case of an individual 

7 who is a first-time homebuyer of a principal resi8 dence in the United States during any taxable year, 

9 there shall be allowed as a credit against the tax im10 posed by this subtitle for the taxable year an amount 

11 equal to so much of the purchase price of the resi12 dence as does not exceed $20,000. 

13 ‘‘(2) TAXABLE INCOME LIMITATION.—No credit 

14 shall be allowed under subsection (a) if the tax15 payer’s adjusted gross income for the taxable year 

16 immediately preceding the taxable year in which the 

17 purchase of the principal residence occurs exceeds 

18 $75,000 ($150,000 in the case of a joint return). 

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

21 ‘‘(1) FIRST-TIME HOMEBUYER.— 

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

23 homebuyer’ has the same meaning as when 

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


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

2 treated as a first-time homebuyer with respect 

3 to any principal residence, such individual may 

4 not be treated as a first-time homebuyer with 

5 respect to any other principal residence. 

6 ‘‘(C) MARRIED INDIVIDUALS FILING

7 JOINTLY.—In the case of married individuals 

8 who file a joint return, the credit under this 

9 section is allowable only if both individuals are 

10 first-time homebuyers. 

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

12 individuals who are not married purchase a 

13 principal residence— 

14 ‘‘(i) the credit under this section is al15 lowable only if each of the individuals is a 

16 first-time homebuyer, and 

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

18 under subsection (a) shall be allocated 

19 among such individuals in such manner as 

20 the Secretary may prescribe. 

21 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin22 cipal residence’ has the same meaning as when used 

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

24 interest in a partnership, S corporation, or trust 


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1 which owns an interest in a residence shall not be 

2 treated as an interest in a residence. 

3 ‘‘(3) PURCHASE.— 

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

5 means any acquisition, but only if— 

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

7 a person whose relationship to the person 

8 acquiring it would result in the disallow9 ance of losses under section 267 or 707(b) 

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

11 for purposes of this section, paragraph (4) 

12 of section 267(c) shall be treated as pro13 viding that the family of an individual shall 

14 include only the individual’s spouse, ances15 tors, and lineal descendants), and 

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

17 hands of the person acquiring it is not de18 termined— 

19 ‘‘(I) in whole or in part by ref20 erence to the adjusted basis of such 

21 property in the hands of the person 

22 from whom acquired, or 

23 ‘‘(II) under section 1014(a) (re24 lating to property acquired from a de25 cedent). 


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

2 is constructed by the taxpayer shall be treated 

3 as purchased by the taxpayer. 

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

5 price’ means the adjusted basis of the principal resi6 dence on the date of acquisition (within the meaning 

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

8 ‘‘(c) DENIAL OF DOUBLE BENEFIT.—No credit shall 

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

10 a deduction or credit is allowed under any other provision 

11 of this chapter. 

12 ‘‘(d) BASIS ADJUSTMENT.—For purposes of this sub13 title, if a credit is allowed under this section with respect 

14 to the purchase of any residence, the basis of such resi15 dence shall be reduced by the amount of the credit so al16 lowed. 

17 ‘‘(e) PROPERTY TO WHICH SECTION APPLIES.—The 

18 provisions of this section shall apply to a principal resi19 dence if the taxpayer purchases the residence during the 

20 period beginning on the date of enactment, and ending 

21 on the date which is 1 year after such date.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Subsection (a) of section 1016 of the Inter24 nal Revenue Code of 1986 (relating to general rule 

25 for adjustments to basis) is amended by striking 


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

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

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

4 paragraph: 

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

6 which a credit was allowed under section 36A, to the 

7 extent provided in section 36A(d).’’. 

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

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

10 ‘‘36’’. 

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

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

13 of the Internal Revenue Code of 1986 is amended by in14 serting after the item relating to section 36 the following 

15 new item: 

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

Æ 


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