I 
111TH CONGRESS 
2D SESSION 
H. R. 5263 
To amend the Internal Revenue Code of 1986 to provide a 5 percent max-
imum rate of tax on gain from the sale or exchange of depreciable 
real property by individuals. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 11, 2010 
Mr. YARMUTH 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 provide 
a 5 percent maximum rate of tax on gain from the 
sale or exchange of depreciable real property by individ-
uals. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Real Estate Invest-
ment Incentive Act of 2010’’. 
SEC. 2. 5 PERCENT MAXIMUM RATE OF TAX ON DEPRE-
CIABLE REAL PROPERTY. 
(a) REGULAR TAX.— 
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(1) IN GENERAL.—Subparagraph (C) of section 
1(h)(1) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(C) with respect to the amount of ad-
justed net capital gain (or, if less, taxable in-
come) in excess of the amount on which a tax 
is determined under subparagraph (B)— 
‘‘(i) 5 percent of the lesser of such ex-
cess or the net depreciable 2010 real prop-
erty gain, and 
‘‘(ii) 15 percent of the remainder of 
such excess (if any);’’. 
(2) NET DEPRECIABLE 2010 REAL PROPERTY 
GAIN.—Subsection (h) of section 1 of such Code is 
amended by adding at the end the following new 
paragraphs: 
‘‘(12) NET DEPRECIABLE 2010 REAL PROPERTY 
GAIN.—For purposes of this subsection, the term 
‘net depreciable 2010 real property gain’ means the 
lesser of— 
‘‘(A) net capital gain determined by taking 
into account only gains and losses from the sale 
or exchange of depreciable real property first 
placed in service by the taxpayer after the date 
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of the enactment of this paragraph and before 
January 1, 2011, or 
‘‘(B) net capital gain. 
For purposes of the preceding sentence, net capital 
gain shall be determined without regard to the 
amount of long-term capital gain (not otherwise 
treated as ordinary income) which would be treated 
as ordinary income if section 1250(b)(1) included all 
depreciation and the applicable percentage under 
section 1250(a) were 100 percent. 
‘‘(13) DEPRECIABLE
REAL
PROPERTY.—For 
purposes of this subsection, the term ‘depreciable 
real property’ means section 1250 property (as de-
fined in section 1250(c)) other than residential rent-
al property which is part of a building with fewer 
than 2 residential rental units.’’. 
(b) MINIMUM TAX.—Subparagraph (C) of section 
55(b)(3) of such Code is amended to read as follows: 
‘‘(C) with respect to the amount of ad-
justed net capital gain (or, if less, taxable ex-
cess) in excess of the amount on which a tax is 
determined under subparagraph (B)— 
‘‘(i) 5 percent of the lesser of such ex-
cess or the net depreciable 2010 real prop-
erty gain, and 
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‘‘(ii) 15 percent of the remainder of 
such excess (if any);’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
Æ 
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