‘‘(ii) 
DEDUCTION
FOR
ESTATE 
TAXES.—An appropriate deduction shall be 
allowed under section 691(c) to any person 
(other than the decedent or the decedent’s 
spouse) with respect to amounts included 
in gross income under clause (i). 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) FIRST-TIME HOMEBUYER.— 
‘‘(A) IN GENERAL.—The term ‘first-time 
homebuyer’ means any individual if such indi-
vidual (and if married, such individual’s spouse) 
has had no present ownership interest in a prin-
cipal residence. 
‘‘(B) SPECIAL RULE FOR DIVORCED INDI-
VIDUALS.—Any individual who is divorced and 
is not described in subparagraph (A) shall be 
treated as a first-time homebuyer for purposes 
of this section if such individual had no present 
ownership interest in a principal residence since 
such individual’s most recent divorce and dur-
ing the 3-year period ending on the date of the 
purchase of the principal residence with respect 
to which payments from a first-time homebuyer 
account are made under this section. 
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‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(3) DESIGNATED
BENEFICIARY.—The term 
‘designated beneficiary’ means— 
‘‘(A) the individual designated at the com-
mencement of the first-time homebuyer account 
as the beneficiary of amounts paid (or to be 
paid) to the account, or 
‘‘(B) in the case of a change in bene-
ficiaries described in subsection (d)(1)(C), the 
individual who is the new beneficiary 
‘‘(4) ACCOUNT
OWNERSHIP.—Except in the 
case of individuals who are married, an account may 
be owned by only one individual and may only have 
one designated beneficiary. 
‘‘(5) COST-OF-LIVING
ADJUSTMENT.—In the 
case of any taxable year beginning in a calendar 
year after 2017, the dollar amounts under sub-
section (b)(1) shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
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mined by substituting ‘calendar year 2007’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
If any amount after adjustment under the preceding 
sentence is not a multiple of $100, such amount 
shall be rounded to the next lower multiple of 
$100.’’. 
(b) EXCESS CONTRIBUTIONS.— 
(1) IN
GENERAL.—Section 4973(a) of such 
Code is amended by striking ‘‘or’’ at the end of 
paragraph (5), by inserting ‘‘or’’ at the end of para-
graph (6), and by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) a first-time homebuyer account (within the 
meaning of section 530A),’’. 
(2) EXCESS CONTRIBUTIONS.—Section 4973 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) EXCESS CONTRIBUTIONS TO FIRST-TIME HOME-
BUYER ACCOUNT.—In the case of a first-time homebuyer 
account, the term ‘excess contributions’ means the amount 
by which the amount contributed for the taxable year to 
such account (other than contributions described in sec-
tion 530A(d)(1)(C) (iv) and (v)) exceeds the contribution 
limits under section 530A(b). For purposes of the pre-
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ceding sentence, any contribution which is distributed 
from the account in a distribution to which section 
530A(d)(1)(C)(iii)(III) applies shall be treated as an 
amount not contributed.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for part VIII of subchapter F of chapter 1 of such Code 
is amended by adding at the end the following new item: 
‘‘Sec. 530A. First-time homebuyer account.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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