I 

111TH CONGRESS 

1ST SESSION H. R. 2851 

To amend the Internal Revenue Code of 1986 to exclude certain gains 

on single-family residential rental property from gross income. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 12, 2009 

Mr. BRADY of Texas (for himself, Mr. SESSIONS, and Mr. AUSTRIA) 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 exclude 

certain gains on single-family residential rental property 

from gross income. 

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 ‘‘Neighborhood Invest5 ment Act of 2009’’. 


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1 SEC. 2. CERTAIN GAINS ON SINGLE-FAMILY RESIDENTIAL 

2 RENTAL PROPERTY EXCLUDED FROM GROSS 

3 INCOME. 

4 (a) IN GENERAL.—Part III of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by inserting after section 139C the following new section: 

7 ‘‘SEC. 139D. CERTAIN GAINS ON SINGLE-FAMILY RESIDEN8 TIAL RENTAL PROPERTY. 

9 ‘‘(a) IN GENERAL.—Gross income shall not include 

10 any gain from the sale or exchange of a qualified single11 family residential rental property. 

12 ‘‘(b) LIMITATION.—The amount of gain excluded 

13 from gross income under subsection (a) with respect to 

14 any sale or exchange shall not exceed $250,000. 

15 ‘‘(c) QUALIFIED SINGLE-FAMILY RESIDENTIAL

16 RENTAL PROPERTY.—For purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘qualified prop18 erty’ means any real property located in the United 

19 States which— 

20 ‘‘(A) was acquired by the taxpayer by pur21 chase (as defined in section 179(d)(2)) during 

22 the period beginning on the date of the enact23 ment of this section and ending on June 30, 

24 2010, 

25 ‘‘(B) was held by the taxpayer for 2 years 

26 or more, and 


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1 ‘‘(C) was rented as a single dwelling unit 

2 on a regular basis during 2 of the taxable years 

3 in the 5 taxable year period ending with the 

4 taxable year in which the property was sold or 

5 exchanged. 

6 ‘‘(2) REGULAR BASIS.—For purposes of para7 graph (1)(C), property shall not be treated as rented 

8 on a regular basis during any taxable year unless— 

9 ‘‘(A) such property is rented on the basis 

10 of months or longer periods, and 

11 ‘‘(B) such property is rented for not less 

12 than 6 months of such year. 

13 ‘‘(d) EXCEPTION FOR NONRESIDENT ALIEN INDIVID14 UALS.—No credit shall be allowed under subsection (a) to 

15 any taxpayer if such taxpayer is a nonresident alien indi16 vidual.’’. 

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

18 for part III of subchapter B of chapter 1 of such Code 

19 is amended by inserting after the item relating to section 

20 139C the following new item: 

‘‘Sec. 139D. Certain gains on single-family residential rental property.’’. 

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

22 this section shall apply to property acquired after the date 

23 of the enactment of this Act. 

Æ 


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