I 

111TH CONGRESS 

1ST SESSION H. R. 3207 

To amend the Internal Revenue Code of 1986 to exclude from gross income 

gain on the sale of certain residential leased-fee interests to holders 

of the leasehold rights. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 14, 2009 

Mr. ABERCROMBIE (for himself and Ms. HIRONO) 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 

from gross income gain on the sale of certain residential 

leased-fee interests to holders of the leasehold rights. 

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

3 SECTION 1. EXCLUSION OF GAIN FROM SALES OF CERTAIN 

4 RESIDENTIAL LEASED-FEE INTERESTS TO 

5 HOLDERS OF THE LEASEHOLD RIGHTS. 

6 (a) GENERAL RULE.—Part III of subchapter B of 

7 chapter 1 of the Internal Revenue Code of 1986 (relating 

8 to items specifically excluded from gross income) is 


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1 amended by inserting after section 139C the following new 

2 section: 

3 ‘‘SEC. 139D. SALES OF CERTAIN RESIDENTIAL LEASED-FEE 

4 INTERESTS TO HOLDERS OF THE LEASEHOLD 

5 RIGHTS. 

6 ‘‘(a) GENERAL RULE.—In the case of a fee simple 

7 owner-lessor, and legal and equitable owners, of qualified 

8 property, gross income does not include gain from the sale 

9 of such property to a holder of the leasehold right if such 

10 holder is— 

11 ‘‘(1) an association of apartment owners of a 

12 multi-family residential leasehold property, or 

13 ‘‘(2) a cooperative housing corporation for a 

14 residential leasehold property. 

15 ‘‘(b) QUALIFIED PROPERTY.—For purposes of sub16 section (a), the term ‘qualified property’ means the leased17 fee interest to any residential house lot or the leased-fee 

18 interest in a condominium or co-operative housing apart19 ment in a multi-family residential leasehold property. 

20 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 

21 section (b)— 

22 ‘‘(1) FEE SIMPLE OWNER, LEASED-FEE INTER23 EST, LEGAL AND EQUITABLE OWNERS.—The terms 

24 ‘fee simple owner’, ‘leased-fee interest’, and ‘legal 

25 and equitable owners’ shall have the same meaning 


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1 as defined in Hawaii Revised Statutes section 516– 

2 1. 

3 ‘‘(2) MULTI-FAMILY RESIDENTIAL LEASEHOLD

4 PROPERTY, MULTI-FAMILY RESIDENTIAL LEASE5 HOLD UNIT.—The terms ‘multi-family residential 

6 leasehold property’ and ‘multi-family residential 

7 leasehold unit’ mean property or units within a 

8 planned unit development, condominium project, or 

9 cooperative housing project, as those terms are de10 fined in Hawaii Revised Statutes section 514C–1. 

11 ‘‘(d) TERMINATION.—This section shall not apply to 

12 any taxable year beginning after December 31, 2014.’’. 

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

14 for such part is amended by inserting after the item relat15 ing to section 139C the following new item: 

‘‘Sec. 139D. Sales of certain residential leased-fee interests to holders of the 

leasehold rights.’’. 

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

17 this section shall apply to sales after December 31, 2009. 

Æ 


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