I 

112TH CONGRESS 

1ST SESSION H. R. 2555 

To amend the Internal Revenue Code of 1986 to expand the incentives 

for the rehabilitation of older buildings, including owner-occupied residences. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 15, 2011 

Mr. TURNER (for himself, Mr. CARNAHAN, Mr. LANGEVIN, Ms. RICHARDSON, 

Mr. TONKO, Mr. BISHOP of Utah, Mrs. CHRISTENSEN, Mr. HOLT, Mr. 

BLUMENAUER, Mr. COHEN, Mr. LOEBSACK, Mr. MCGOVERN, Mr. 

CAPUANO, and Mr. CICILLINE) 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 expand 

the incentives for the rehabilitation of older buildings, 

including owner-occupied residences. 

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 Historic Homeowner5 ship Revitalization Act of 2011. 


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1 SEC. 2. HISTORIC HOMEOWNERSHIP REHABILITATION 

2 CREDIT. 

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

5 1986 (relating to nonrefundable personal credits) is 

6 amended by inserting after section 25D the following new 

7 section: 

8 ‘‘SEC. 25E. HISTORIC HOMEOWNERSHIP REHABILITATION 

9 CREDIT. 

10 ‘‘(a) GENERAL RULE.—In the case of an individual, 

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

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

13 20 percent of the qualified rehabilitation expenditures 

14 made by the taxpayer with respect to a qualified historic 

15 home. 

16 ‘‘(b) DOLLAR LIMITATION.—The credit allowed by 

17 subsection (a) with respect to any residence of a taxpayer 

18 shall not exceed $60,000 ($30,000 in the case of a married 

19 individual filing a separate return). 

20 ‘‘(c) QUALIFIED REHABILITATION EXPENDITURE.— 

21 For purposes of this section— 

22 ‘‘(1) IN GENERAL.—The term ‘qualified reha23 bilitation expenditure’ means any amount properly 

24 chargeable to capital account— 

25 ‘‘(A) in connection with the certified reha26 bilitation of a qualified historic home, and 


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1 ‘‘(B) for property for which depreciation 

2 would be allowable under section 168 if the 

3 qualified historic home were used in a trade or 

4 business. 

5 ‘‘(2) CERTAIN EXPENDITURES NOT IN6 CLUDED.— 

7 ‘‘(A) EXTERIOR.—Such term shall not in8 clude any expenditure in connection with the re9 habilitation of a building unless at least 5 per10 cent of the total expenditures made in the reha11 bilitation process are allocable to the rehabilita12 tion of the exterior of such building. 

13 ‘‘(B) OTHER RULES TO APPLY.—Rules 

14 similar to the rules of clauses (ii) and (iii) of 

15 section 47(c)(2)(B) shall apply. 

16 ‘‘(3) MIXED USE OR MULTIFAMILY BUILDING.— 

17 If only a portion of a building is used as the prin18 cipal residence of the taxpayer, only qualified reha19 bilitation expenditures which are properly allocable 

20 to such portion shall be taken into account under 

21 this section. 

22 ‘‘(d) CERTIFIED REHABILITATION.—For purposes of 

23 this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘certified reha2 bilitation’ has the meaning given such term by sec3 tion 47(c)(2)(C). 

4 ‘‘(2) APPROVED STATE PROGRAM.—The term 

5 ‘certified rehabilitation’ includes a certification made 

6 by— 

7 ‘‘(A) a State Historic Preservation Officer 

8 who administers a State Historic Preservation 

9 Program approved by the Secretary of the Inte10 rior pursuant to section 101(b)(1) of the Na11 tional Historic Preservation Act, or 

12 ‘‘(B) a local government, certified pursuant 

13 to section 101(c)(1) of the National Historic 

14 Preservation Act and authorized by a State 

15 Historic Preservation Officer, or the Secretary 

16 of the Interior where there is no approved State 

17 program, subject to such terms and conditions 

18 as may be specified by the Secretary of the In19 terior for the rehabilitation of buildings within 

20 the jurisdiction of such officer (or local govern21 ment) for purposes of this section. 

22 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur23 poses of this section— 


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1 ‘‘(1) QUALIFIED HISTORIC HOME.—The term 

2 ‘qualified historic home’ means a certified historic 

3 structure— 

4 ‘‘(A) which has been substantially rehabili5 tated, and 

6 ‘‘(B) which (or any portion of which)— 

7 ‘‘(i) is owned by the taxpayer, and 

8 ‘‘(ii) is used (or will, within a reason9 able period, be used) by such taxpayer as 

10 his principal residence. 

11 ‘‘(2) SUBSTANTIALLY REHABILITATED.—The 

12 term ‘substantially rehabilitated’ has the meaning 

13 given such term by section 47(c)(1)(C). 

14 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin15 cipal residence’ has the same meaning as when used 

16 in section 121. 

17 ‘‘(4) CERTIFIED HISTORIC STRUCTURE.— 

18 ‘‘(A) IN GENERAL.—The term ‘certified 

19 historic structure’ means any building (and its 

20 structural components) which— 

21 ‘‘(i) is listed in the National Register, 

22 or 

23 ‘‘(ii) is located in a registered historic 

24 district (as defined in section 47(c)(3)(B)) 

25 and is certified by the Secretary of the InVerDate Mar 15 2010 02:43 Jul 16, 2011 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2555.IH H2555

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1 terior as being of historic significance to 

2 the district. 

3 ‘‘(5) REHABILITATION NOT COMPLETE BEFORE

4 CERTIFICATION.—A rehabilitation shall not be treat5 ed as complete before the date of the certification re6 ferred to in subsection (d). 

7 ‘‘(6) TENANT-STOCKHOLDER IN COOPERATIVE

8 HOUSING CORPORATION.—If the taxpayer holds 

9 stock as a tenant-stockholder (as defined in section 

10 216) in a cooperative housing corporation (as de11 fined in such section), such stockholder shall be 

12 treated as owning the house or apartment which the 

13 taxpayer is entitled to occupy as such stockholder. 

14 ‘‘(7) ALLOCATION OF EXPENDITURES RELAT15 ING TO EXTERIOR OF BUILDING CONTAINING COOP16 ERATIVE OR CONDOMINIUM UNITS.—The percentage 

17 of the total expenditures made in the rehabilitation 

18 of a building containing cooperative or condominium 

19 residential units allocated to the rehabilitation of the 

20 exterior of the building shall be attributed propor21 tionately to each cooperative or condominium resi22 dential unit in such building for which a credit 

23 under this section is claimed. 


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1 ‘‘(8) CARRYBACK AND CARRYFORWARD OF

2 CREDIT UNUSED BY REASON OF LIMITATION BASED

3 ON TAX LIABILITY.— 

4 ‘‘(A) IN GENERAL.—If the credit allowable 

5 under subsection (a) for any taxable year ex6 ceeds the applicable tax limit for such taxable 

7 year, such excess shall be a carryback to the 

8 preceding taxable year and a carryforward to 

9 each of the 3 succeeding taxable years and, sub10 ject to the limitations of subparagraph (B), 

11 shall be added to the credit allowable by sub12 section (a) for such preceding or succeeding 

13 taxable year, as the case may be. 

14 ‘‘(B) AMOUNT CARRIED TO EACH YEAR.— 

15 Rules similar to the rules of section 39(a)(2) 

16 shall apply for purposes of this paragraph. 

17 ‘‘(C) LIMITATION.—The amount of the un18 used credit which may be taken into account 

19 under subparagraph (A) for any taxable year 

20 shall not exceed the amount (if any) by which 

21 the applicable tax limit for such taxable year 

22 exceeds the sum of— 

23 ‘‘(i) the credit allowable under sub24 section (a) for such taxable year deterVerDate Mar 15 2010 02:43 Jul 16, 2011 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2555.IH H2555

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1 mined without regard to this paragraph, 

2 and 

3 ‘‘(ii) the amounts which, by reason of 

4 this paragraph, are carried to such taxable 

5 year and are attributable to taxable years 

6 before the unused credit year. 

7 ‘‘(D) APPLICABLE TAX LIMIT.—For pur8 poses of this paragraph, the term ‘applicable 

9 tax limit’ means— 

10 ‘‘(i) in the case of a taxable year to 

11 which section 26(a)(2) applies, the limita12 tion imposed by section 26(a)(2) for the 

13 taxable year reduced by the sum of the 

14 credits allowable under this subpart (other 

15 than this section), and 

16 ‘‘(ii) in the case of a taxable year to 

17 which section 26(a)(2) does not apply, the 

18 limitation imposed by section 26(a)(1) for 

19 the taxable year reduced by the sum of the 

20 credits allowable under this subpart (other 

21 than this section and sections 24, 25A(i), 

22 25B, 25D, 30, 30B, 30D). 

23 ‘‘(9) CREDIT MAY BE ASSIGNED.—The amount 

24 of qualified rehabilitation expenditures which would 

25 (but for this paragraph) be taken into account under 


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1 subsection (a) for any taxable year by any person 

2 (hereafter in this paragraph referred to as the ‘ini3 tial taxpayer’)— 

4 ‘‘(A) may be taken into account by any 

5 other person to whom such expenditures are as6 signed by the initial taxpayer, and 

7 ‘‘(B) shall not be taken to account by ini8 tial taxpayer. 

9 Any person to whom such expenditures are assigned 

10 under subparagraph (A) shall be treated for pur11 poses of this title as the taxpayer with respect to 

12 such expenditures. 

13 ‘‘(f) WHEN EXPENDITURES TAKEN INTO AC14 COUNT.—In the case of a building other than a building 

15 to which subsection (g) applies, qualified rehabilitation ex16 penditures shall be treated for purposes of this section as 

17 made— 

18 ‘‘(1) on the date the rehabilitation is completed, 

19 or 

20 ‘‘(2) to the extent provided by the Secretary by 

21 regulation, when such expenditures are properly 

22 chargeable to capital account. 

23 Regulations under paragraph (2) shall include a rule simi24 lar to the rule under section 50(a)(2) (relating to recapVerDate Mar 15 2010 02:43 Jul 16, 2011 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2555.IH H2555

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1 ture if property ceases to qualify for progress expendi2 tures). 

3 ‘‘(g) ALLOWANCE OF CREDIT FOR PURCHASE OF RE4 HABILITATED HISTORIC HOME.— 

5 ‘‘(1) IN GENERAL.—In the case of a qualified 

6 purchased historic home, the taxpayer shall be treat7 ed as having made (on the date of purchase) the ex8 penditures made by the seller of such home. For 

9 purposes of the preceding sentence, expenditures 

10 made by the seller shall be deemed to be qualified 

11 rehabilitation expenditures if such expenditures, if 

12 made by the purchaser, would be qualified rehabili13 tation expenditures. 

14 ‘‘(2) QUALIFIED PURCHASED HISTORIC

15 HOME.—For purposes of this subsection, the term 

16 ‘qualified purchased historic home’ means any sub17 stantially rehabilitated certified historic structure 

18 purchased by the taxpayer if— 

19 ‘‘(A) the taxpayer is the first purchaser of 

20 such structure after the date rehabilitation is 

21 completed, and the purchase occurs within 5 

22 years after such date, 

23 ‘‘(B) the structure (or a portion thereof) 

24 will, within a reasonable period, be the principal 

25 residence of the taxpayer, 


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1 ‘‘(C) no credit was allowed to the seller 

2 under this section or section 47 with respect to 

3 such rehabilitation, and 

4 ‘‘(D) the taxpayer is furnished with such 

5 information as the Secretary determines is nec6 essary to determine the credit under this sub7 section. 

8 ‘‘(h) RECAPTURE.— 

9 ‘‘(1) IN GENERAL.—If, before the end of the 5- 

10 year period beginning on the date on which the reha11 bilitation of the building is completed (or, if sub12 section (g) applies, the date of purchase of such 

13 building by the taxpayer)— 

14 ‘‘(A) the taxpayer disposes of such tax15 payer’s interest in such building, or 

16 ‘‘(B) such building ceases to be used as the 

17 principal residence of the taxpayer or ceases to 

18 be a certified historic structure, the taxpayer’s 

19 tax imposed by this chapter for the taxable year 

20 in which such disposition or cessation occurs 

21 shall be increased by the recapture percentage 

22 of the credit allowed under this section for all 

23 prior taxable years with respect to such reha24 bilitation. 


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1 ‘‘(2) RECAPTURE PERCENTAGE.—For purposes 

2 of paragraph (1), the recapture percentage shall be 

3 determined in accordance with the table under sec4 tion 50(a)(1)(B), deeming such table to be amend5 ed— 

6 ‘‘(A) by striking ‘If the property ceases to 

7 be investment credit property within—’ and in8 serting ‘If the disposition or cessation occurs 

9 within—’, and 

10 ‘‘(B) in clause (i) by striking ‘One full year 

11 after placed in service’ and inserting ‘One full 

12 year after the taxpayer becomes entitled to the 

13 credit’. 

14 ‘‘(3) TRANSFER BETWEEN SPOUSES OR INCI15 DENT TO DIVORCE.—In the case of any transfer de16 scribed in subsection (a) of section 1041 (relating to 

17 transfers between spouses or incident to divorce)— 

18 ‘‘(A) the foregoing provisions of this sub19 section shall not apply, and 

20 ‘‘(B) the same tax treatment under this 

21 subsection with respect to the transferred prop22 erty shall apply to the transferee as would have 

23 applied to the transferor. 

24 ‘‘(i) BASIS ADJUSTMENTS.—For purposes of this 

25 subtitle, if a credit is allowed under this section for any 


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1 expenditure with respect to any property (including any 

2 purchase under subsection (g)), the increase in the basis 

3 of such property which would (but for this subsection) re4 sult from such expenditure shall be reduced by the amount 

5 of the credit so allowed. 

6 ‘‘(j) PROCESSING FEES.—Any State may impose a 

7 fee for the processing of applications for the certification 

8 of any rehabilitation under this section provided that the 

9 amount of such fee is used only to defray expenses associ10 ated with the processing of such applications. 

11 ‘‘(k) DENIAL OF DOUBLE BENEFIT.—No credit shall 

12 be allowed under this section for any amount for which 

13 credit is allowed under section 47. 

14 ‘‘(l) REGULATIONS.—The Secretary shall prescribe 

15 such regulations as may be appropriate to carry out the 

16 purposes of this section, including regulations where less 

17 than all of a building is used as a principal residence and 

18 where more than 1 taxpayer use the same dwelling unit 

19 as their principal residence.’’ 

20 (b) CONFORMING AMENDMENTS.— 

21 (1)(A) Subparagraph (C) of section 25(e)(1) of 

22 such Code is amended by inserting ‘‘25E,’’ after 

23 ‘‘sections 25D,’’. 


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1 (B) Subparagraph (A) of section 25D(2) of 

2 such Code is amended by inserting ‘‘and section 

3 25E’’ after ‘‘(other than this section’’. 

4 (C) Paragraph (1) of section 1400C(d) of such 

5 Code is amended by striking ‘‘section 25D’’ and in6 serting ‘‘sections 25D and 25E’’. 

7 (2)(A) Clause (ii) of section 25(e)(1)(C) of such 

8 Code is amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 

9 (B) Paragraph (2) of section 1400C of such 

10 Code is amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 

11 (3) Subsection (a) of section 1016 of such Code 

12 is amended by striking ‘‘and’’ at the end of para13 graph (36), by striking the period at the end of 

14 paragraph (37) and inserting ‘‘, and’’, and by add15 ing at the end the following new item: 

16 ‘‘(38) to the extent provided in section 25E(i).’’ 

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

18 for subpart A of part IV of subchapter A of chapter 1 

19 of such Code is amended by inserting after the item relat20 ing to section 25D the following new item: 

‘‘Sec. 25E. Historic homeownership rehabilitation credit.’’. 

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

22 this section shall apply with respect to rehabilitations the 

23 physical work on which begins after the date of enactment 

24 of this Act. 


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1 SEC. 3. EXPANSION OF INCENTIVES FOR BUILDING REHA2 BILITATION. 

3 (a) INCREASE IN REHABILITATION CREDIT FOR

4 BUILDINGS IN HIGH COST AREAS.—Paragraph (2) of 

5 subsection 47(c) of such Code (defining qualified rehabili6 tation expenditures) is amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(E) INCREASE IN CREDIT FOR BUILDINGS

9 IN HIGH COST AREAS.—In the case of any 

10 qualified rehabilitated building which is residen11 tial rental property (as defined in paragraph 

12 (2)(D)) located in a qualified census tract or 

13 difficult development area which is designated 

14 for purposes of section 42(d)(5)(C), the quali15 fied rehabilitation expenditures taken into ac16 count under this section shall be 130 percent of 

17 such expenditures determined without regard to 

18 this subparagraph.’’. 

19 (b) REHABILITATION CREDIT MAY BE TRANS20 FERRED.— 

21 (1) IN GENERAL.—Subsection (b) of section 47 

22 of such Code (relating to when expenditures taken 

23 into account) is amended by adding at the end the 

24 following new paragraph: 

25 ‘‘(3) CREDIT MAY BE ASSIGNED.—The amount 

26 of qualified rehabilitation expenditures with respect 


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1 to property described in subsection (c)(1)(A)(iv)(II) 

2 which would (but for this paragraph) be taken into 

3 account under subsection (a) for any taxable year by 

4 any person (hereafter in this paragraph referred to 

5 as the ‘initial taxpayer’)— 

6 ‘‘(A) may be taken into account by any 

7 other person to whom such expenditures are as8 signed by the initial taxpayer, and 

9 ‘‘(B) shall not be taken to account by ini10 tial taxpayer. 

11 Any person to whom such expenditures are assigned 

12 under subparagraph (A) shall be treated for pur13 poses of this title as the taxpayer with respect to 

14 such expenditures.’’. 

15 (2) CONFORMING AMENDMENT.—The heading 

16 for such subsection (b) is amended by inserting ‘‘; 

17 ELIGIBILITY FOR CREDIT MAY BE ASSIGNED’’ after 

18 ‘‘ACCOUNT’’. 

19 (c) APPLICABILITY TO BUILDINGS HELD FOR

20 SALE.— 

21 (1) IN GENERAL.— 

22 (A) Clause (iv) of section 47(c)(1)(A) of 

23 such Code is amended to read as follows: 

24 ‘‘(iv) depreciation (or amortization in 

25 lieu of depreciation)— 


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1 ‘‘(I) is allowable with respect to 

2 such building, or 

3 ‘‘(II) in the case of a residential 

4 property, would be allowable with re5 spect to such building but for the 

6 building being held for sale.’’. 

7 (B) Paragraph (2) of section 47(c) of such 

8 Code is amended by adding at the end the fol9 lowing new subparagraph: 

10 ‘‘(E) SPECIAL RULE FOR CERTAIN PROP11 ERTY HELD FOR SALE.—For purposes of this 

12 paragraph, in the case of a qualified rehabili13 tated building described in paragraph 

14 (1)(A)(iv)(II), such building shall be treated as 

15 owned by the taxpayer as rental property with 

16 respect to which the straight line depreciation 

17 method is used over a recovery period deter18 mined under subsection (c) or (g) of section 

19 168.’’. 

20 (2) CONFORMING AMENDMENT.—Paragraph (4) 

21 of section 50(a) of such Code is amended by striking 

22 ‘‘or’’ at the end of subparagraph (A), but striking 

23 the period at the end of subparagraph (B) and in24 serting ‘‘, or’’, and by inserting after subparagraph 

25 (B) the following new subparagraph: 


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1 ‘‘(C) property described in section 

2 47(c)(1)(A)(iv)(II) that has not otherwise 

3 ceased to be investment property.’’. 

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

5 this section shall apply with respect to rehabilitations the 

6 physical work on which begins after the date of enactment 

7 of this Act. 

Æ 


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