I
103D CONGRESS
1ST SESSION
H. R. 1908
To amend the Internal Revenue Code of 1986 to modify the tax treatment
of cooperative housing corporations.
IN THE HOUSE OF REPRESENTATIVES
APRIL 28, 1993
Mr. RANGEL 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 modify
the tax treatment of cooperative housing corporations.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TAX TREATMENT OF COOPERATIVE HOUSING
CORPORATIONS.
(a) SECTION 277 NOT TO APPLY TO COOPERATIVE
HOUSING CORPORATIONS.—Section 277(b) of the Internal
Revenue Code of 1986 (relating to exceptions) is amended
by striking ‘‘or’’ at the end of paragraph (3), by striking
the period at the end of paragraph (4) and inserting a
comma and ‘‘or’’, and by adding at the end thereof the
following new paragraph:
‘‘(5) which for the taxable year is a cooperative
housing corporation described in section 216(b)(1)
(determined 
without 
regard 
to 
section
143(k)(9)(E)).’’
(b) APPLICATION
OF RULES RELATING
TO TAX
TREATMENT OF COOPERATIVES.—
(1) PATRONAGE
EARNINGS
MAY
BE
OFFSET
ONLY BY PATRONAGE LOSSES.—Section 1388(a) of
such Code is amended by adding at the end the fol-
lowing new sentence: ‘‘In no event shall any patron-
age losses of an organization described in section
277(b)(5) be used to offset earnings which are not
patronage earnings.’’
(2) PATRONAGE EARNINGS AND LOSSES OF CO-
OPERATIVE HOUSING CORPORATIONS.—Section 1388
of such Code is amended by adding at the end the
following new subsection:
‘‘(k) PATRONAGE EARNINGS OR LOSSES DEFINED.—
For purposes of this section—
‘‘(1) IN GENERAL.—The terms ‘patronage earn-
ings’ and ‘patronage losses’ mean earnings and
losses, respectively, which are derived from business
done with or for patrons of the organization.
‘‘(2) SPECIAL RULES FOR COOPERATIVE HOUS-
ING
CORPORATION.—In the case of a cooperative
housing corporation, the following earnings shall be
treated as patronage earnings:
‘‘(A) Interest on reasonable reserves estab-
lished in connection with the corporation, in-
cluding reserves required by a governmental
agency or lender.
‘‘(B) Income from laundry and parking fa-
cilities to the extent attributable to use of the
facilities by tenant-stockholders and their
guests.
‘‘(C) In the case of a cooperative housing
corporation with respect to which the require-
ments of clause (i) of section 143(k)(9)(D) are
met at all times during the taxable year, rental
income from other than tenant-stockholders to
the extent attributable to any project operated
by the corporation.
‘‘(3) DEFINITIONS.—For purposes of paragraph
(2)—
‘‘(A) COOPERATIVE
HOUSING
CORPORA-
TION.—The term ‘cooperative housing corpora-
tion’ has the meaning given such term by sec-
tion 216(b)(1) (without regard to section
143(k)(9)(E)).
‘‘(B) TENANT-STOCKHOLDER.—The term
‘tenant-stockholder’ has the meaning given such
term by section 216(b)(2).’’
(3) 
CONFORMING
AMENDMENT.—Section
1388(j) of such Code is amended by striking para-
graph (4).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning before,
on, and after the date of the enactment of this Act.
Æ