I
107TH CONGRESS
1ST SESSION
H. R. 1773
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for the purchase of a principal residence by a first-time
homebuyer.
IN THE HOUSE OF REPRESENTATIVES
MAY 9, 2001
Mr. ENGLISH (for himself and Mrs. THURMAN) 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 allow a
credit against income tax for the purchase of a principal
residence by a first-time homebuyer.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR FIRST-TIME HOMEBUYERS.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 25A the following new
section:
‘‘(5) OTHER TAXPAYERS.—If 2 or more individ-
uals who are not married purchase a principal resi-
dence, the amount of the credit allowed under sub-
section (a) shall be allocated among such individuals
in such manner as the Secretary may prescribe, ex-
cept that the total amount of the credits allowed to
all such individuals shall not exceed $6,500.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) FIRST-TIME HOMEBUYER.—
‘‘(A) IN GENERAL.—The term ‘first-time
homebuyer’ means any individual is such indi-
vidual (and if married, such individual’s spouse)
had no present ownership interest in a principal
residence in the United States during the 3-
year period ending on the date of the purchase
of the principal residence to which this section
applies.
‘‘(B) ONE-TIME ONLY.—If an individual is
treated as a first-time homebuyer with respect
to any principal residence, such individual may
not be treated as a first-time homebuyer with
respect to any other principal residence.
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used
in section 121.
‘‘(3) PURCHASE AND PURCHASE PRICE.—The
terms ‘purchase’ and ‘purchase price’ have the
meanings provided by section 1400C(e).
‘‘(d) CARRYFORWARD OF UNUSED CREDIT.—If the
credit allowable under subsection (a) for any taxable year
exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable
under this subpart (other than this section), such excess
shall be carried to the succeeding taxable year and added
to the credit allowable under subsection (a) for such tax-
able year.
‘‘(e) REPORTING.—If the Secretary requires informa-
tion reporting under section 6045 by a person described
in subsection (e)(2) thereof to verify the eligibility of tax-
payers for the credit allowable by this section, the excep-
tion provided by section 6045(e)(5) shall not apply.
‘‘(f) DENIAL OF DOUBLE BENEFIT.—No credit shall
be allowed under subsection (a) if the credit under section
1400C is allowed.
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section with respect
to the purchase of any residence, the basis of such resi-
dence shall be reduced by the amount of the credit so al-
lowed.
‘‘(h) PROPERTY TO WHICH SECTION APPLIES.—The
provisions of this section apply to a principal residence if
the taxpayer enters into, on or after June 1, 2001, and
before June 1, 2002, a binding contract to purchase the
residence, and purchases and occupies the residence before
January 1, 2003.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 1016 of such Code
(relating to general rule for adjustments to basis) is
amended by striking ‘‘and’’ at the end of paragraph
(26), by striking the period at the end of paragraph
(27) and inserting ‘‘, and’’, and by adding at the
end thereof the following new paragraph:
‘‘(28) in the case of a residence with respect to
which a credit was allowed under section 25B, to the
extent provided in section 25B(g).’’.
(2) Subsection (c) of section 23 of such Code
is amended by striking ‘‘section 1400C’’ and insert-
ing ‘‘sections 25B and 1400C’’.
(3) Subparagraph (C) of section 25(e)(1) of
such Code is amended by striking ‘‘sections 23 and’’
and inserting ‘‘sections 23, 25B, and 1400C’’.
(4) Subsection (d) of section 1400C of such
Code is amended by inserting ‘‘and section 25B’’
after ‘‘other than this section’’.
(c) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 25A the following new item:
‘‘Sec. 25B. Purchase of principal residence by first-time home-
buyer.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
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