I 
113TH CONGRESS 
1ST SESSION H. R. 2929 
To amend the Internal Revenue Code of 1986 to allow a deduction for 
contributions to tax-exempt Housing Equity Savings Accounts. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 1, 2013 
Mr. CARNEY (for himself, Mr. HECK of Nevada, Mr. WEBSTER of Florida, 
and Mr. WELCH) 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 
deduction for contributions to tax-exempt Housing Eq-
uity Savings Accounts. 
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 ‘‘Creating Homeowner-
ship Opportunity Act of 2013’’. 
SEC. 2. HOUSING EQUITY SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions for individuals) is amended 
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by redesignating section 224 as section 225 and by insert-
ing after section 223 the following new section: 
‘‘SEC. 224. HOUSING EQUITY SAVINGS ACCOUNTS. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an eligi-
ble individual, there shall be allowed as a deduction the 
aggregate amount paid in cash during the taxable year 
by or on behalf of such individual to a housing equity sav-
ings account of such individual. 
‘‘(b) LIMITATION.—The amount allowable as a de-
duction under subsection (a) for any taxable year shall not 
exceed the lesser of— 
‘‘(1) $10,000, or 
‘‘(2) an amount equal to the compensation (as 
defined in section 219(f)(1)) includible in the indi-
vidual’s gross income for such taxable year. 
‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 
section, the term ‘eligible individual’ means, with respect 
to any taxable year, any individual if such individual (and 
if married, such individual’s spouse) had no present own-
ership interest in a principal residence during the 3-year 
period ending at the close of the preceding taxable year. 
‘‘(d) HOUSING EQUITY SAVINGS ACCOUNT.—For 
purposes of this section, the term ‘housing equity savings 
account’ means a trust created or organized in the United 
States exclusively for the benefit of an individual, but only 
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if the written governing instrument creating the trust 
meets the following requirements: 
‘‘(1) Except in the case of rollover contributions 
from another housing equity savings account of such 
individual— 
‘‘(A) no contribution will be accepted un-
less it is in cash, and 
‘‘(B) contributions will not be accepted for 
the taxable year in excess of the dollar amount 
in effect for the taxable year under subsection 
(b)(1). 
‘‘(2) The trustee is a bank (as defined in sec-
tion 408(n)) or such other person who demonstrates 
to the satisfaction of the Secretary that the manner 
in which such other person will administer the trust 
will be consistent with the requirements of this sec-
tion. 
‘‘(3) No part of the trust funds will be invested 
in life insurance contracts. 
‘‘(4) The interest of an individual in the bal-
ance in his account is nonforfeitable. 
‘‘(5) The assets of the trust will not be commin-
gled with other property except in a common trust 
fund or common investment fund. 
‘‘(e) TAX TREATMENT OF DISTRIBUTIONS.— 
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‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, any amount distributed out 
of a housing equity savings account shall be included 
in gross income of the distributee for the taxable 
year in which the distribution is received. Notwith-
standing any other provision of this title (including 
chapters 11 and 12), the basis of any person in such 
an account is zero. 
‘‘(2) EXCEPTION FOR AMOUNTS USED TO PUR-
CHASE
PRINCIPAL
RESIDENCE
AND
FOR
CERTAIN 
PAYMENTS
TO
INDIVIDUAL
RETIREMENT
AC-
COUNTS.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any distribution during the taxable 
year which would (but for this paragraph) be 
includible in gross income for such year to the 
extent that the aggregate of such distributions 
during the taxable year do not exceed the ag-
gregate qualified payments made by the account 
beneficiary during such year. 
‘‘(B) QUALIFIED PAYMENT.—For purposes 
of this paragraph, the term ‘qualified payment’ 
means— 
‘‘(i) any payment of qualified acquisi-
tion 
costs 
(as 
defined 
in 
section 
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72(t)(8)(C)) incurred with respect to the 
principal residence of the account bene-
ficiary, and 
‘‘(ii) any payment to an individual re-
tirement account but only if— 
‘‘(I) the account beneficiary of 
the housing equity savings account 
from which the payment is made is 
also the beneficiary of the individual 
retirement account, and 
‘‘(II) the payment is a qualified 
IRA payment. 
Any payment described in clause (ii) shall 
be treated for purposes of this title as a 
rollover contribution to the individual re-
tirement account. 
‘‘(C) QUALIFIED IRA PAYMENT.—For pur-
poses of subparagraph (B), the term ‘qualified 
IRA payment’ means any payment if— 
‘‘(i) the account beneficiary— 
‘‘(I) is an eligible individual at 
the time of the payment, and 
‘‘(II) attains age 55 as of the 
close of the taxable year during which 
the payment is made, 
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‘‘(ii) the account beneficiary is— 
‘‘(I) an eligible individual at the 
time of the payment, and 
‘‘(II) has been an eligible indi-
vidual throughout the 20-year period 
ending on the date of the payment, or 
‘‘(iii) the payment is made within 1 
year after the date of a payment described 
in subparagraph (B)(i). 
‘‘(3) EXCEPTIONS
FOR
CERTAIN
OTHER
DIS-
TRIBUTIONS.—Rules similar to the rules of para-
graphs (3), (4), (5), and (6) of section 408(d) shall 
apply for purposes of this section. 
‘‘(4) ADDITIONAL TAX ON AMOUNTS INCLUDED 
IN GROSS INCOME.—If any distribution from a hous-
ing equity savings account is includible in gross in-
come of the account beneficiary, the tax liability of 
such beneficiary under this chapter for the taxable 
year in which the distribution is received shall be in-
creased by an amount equal to 20 percent of the 
amount of the distribution. 
‘‘(f) TAX TREATMENT OF ACCOUNTS.— 
‘‘(1) EXEMPTION FROM TAX.—A housing equity 
savings account is exempt from taxation under this 
subtitle unless such account has ceased to be a hous-
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ing equity savings account by reason of paragraph 
(2). Notwithstanding the preceding sentence, any 
such account is subject to the taxes imposed by sec-
tion 511 (relating to imposition of tax on unrelated 
business income of charitable, etc. organizations). 
‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 
to the rules of paragraphs (2) and (4) of section 
408(e) shall apply to housing equity savings ac-
counts, and any amount treated as distributed under 
such rules shall be treated as not used to make pay-
ments described in subsection (e)(2). 
‘‘(g) BENEFICIARY MUST BE UNDER AGE 55.—No 
deduction shall be allowed under this section with respect 
to any payment to a housing equity savings account for 
the benefit of an individual if such individual has attained 
age 55 before the close of such individual’s taxable year 
for which the contribution was made. 
‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) OTHER
DEFINITIONS.—For purposes of 
this section— 
‘‘(A) ACCOUNT BENEFICIARY.—The term 
‘account beneficiary’ means the individual for 
whose benefit the housing equity savings ac-
count was established. 
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‘‘(B) PRINCIPAL
RESIDENCE.—The term 
‘principal residence’ has the same meaning as 
when used in section 121, except that such 
term shall include only residences located in the 
United States. 
‘‘(2) COST-OF-LIVING ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2015, the dollar amount in subsection (b)(1) 
shall be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which such taxable year be-
gins determined by substituting ‘calendar 
year 2014’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
‘‘(B) ROUNDING.—If any increase under 
subparagraph (A) is not a multiple of $50, such 
increase shall be rounded to the nearest mul-
tiple of $50. 
‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
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‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers). 
‘‘(B) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(C) Section 219(f)(5) (relating to em-
ployer payments). 
‘‘(D) Section 408(g) (relating to commu-
nity property laws). 
‘‘(E) Section 408(h) (relating to custodial 
accounts). 
‘‘(i) REPORTS.—The trustee of a housing equity sav-
ings account shall make such reports regarding such ac-
count to the Secretary and to the individual for whose ben-
efit the account is maintained with respect to contribu-
tions, distributions, and such other matters as the Sec-
retary may by regulation prescribe. The reports required 
by this subsection shall be filed at such time and in such 
manner, and furnished to such individuals at such time 
and in such manner, as may be required by such regula-
tions.’’. 
(b) DEDUCTION ALLOWED
IN ARRIVING
AT AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
such Code is amended by inserting after paragraph (21) 
the following new paragraph: 
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‘‘(22) HOUSING
EQUITY
SAVINGS
ACCOUNT 
CONTRIBUTIONS.—The deduction allowed by section 
224.’’. 
(c) TAX ON EXCESS CONTRIBUTIONS.— 
(1) Subsection (a) of section 4973 of such Code 
(relating to tax on excess contributions to individual 
retirement accounts, etc.) is amended by striking 
‘‘or’’ at the end of paragraph (4), by inserting ‘‘or’’ 
at the end of paragraph (5), and by inserting after 
paragraph (5) the following new paragraph: 
‘‘(6) a housing equity savings account (within 
the meaning of section 224(d)),’’. 
(2) Section 4973 of such Code is amended by 
adding at the end the following new subsection: 
‘‘(h) EXCESS CONTRIBUTIONS TO HOUSING EQUITY 
SAVINGS ACCOUNTS.—For purposes of this section, in the 
case of housing equity savings accounts (within the mean-
ing of section 224(d)), the term ‘excess contributions’ 
means the sum of— 
‘‘(1) the excess (if any) of— 
‘‘(A) the aggregate amount contributed for 
the taxable year to the accounts (other than 
rollover contributions), over 
‘‘(B) the amount allowable as a deduction 
under section 224 for such contributions, and 
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‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
‘‘(A) the distributions out of the accounts 
which were included in gross income under 
rules similar to the rules of section 408(d)(5) 
which apply to such accounts by reason of sec-
tion 224(e)(3), and 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as a deduction under section 224(b) for 
the taxable year, over 
‘‘(ii) the amount contributed to the 
accounts for the taxable year. 
For purposes of this subsection, any contribution 
which is distributed out of the housing equity sav-
ings account in a distribution to which the rules 
similar to the rules of section 408(d)(4) which apply 
to such accounts by reason of section 224(e)(3) shall 
be treated as an amount not contributed.’’. 
(d) TAX ON PROHIBITED TRANSACTIONS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
4975(e) of such Code (relating to prohibited trans-
actions) is amended by striking ‘‘or’’ at the end of 
subparagraph (F), by redesignating subparagraph 
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(G) as subparagraph (H), and by inserting after 
subparagraph (F) the following new subparagraph: 
‘‘(G) a housing equity savings account de-
scribed in section 224(d), or’’. 
(2) SPECIAL RULE.—Subsection (c) of section 
4975 of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(7) SPECIAL RULE FOR HOUSING EQUITY SAV-
INGS ACCOUNTS.—An individual for whose benefit a 
housing equity savings account is established shall 
be exempt from the tax imposed by this section with 
respect to any transaction concerning such account 
(which would otherwise be taxable under this sec-
tion) if section 224(f)(2) applies with respect to such 
transaction.’’. 
(e) FAILURE TO PROVIDE REPORTS ON HOUSING 
EQUITY SAVINGS ACCOUNTS.—Paragraph (2) of section 
6693(a) of such Code (relating to failure to provide re-
ports on individual retirement accounts or annuities) is 
amended by striking ‘‘and’’ at the end of subparagraph 
(D), by striking the period at the end of subparagraph 
(E) and inserting ‘‘, and’’, and by adding at the end the 
following new subparagraph: 
‘‘(F) Section 224(i) (relating to housing 
equity savings accounts).’’. 
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(f) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by striking the item relating to section 224 
and inserting the following new items: 
‘‘Sec. 224. Housing equity savings accounts. 
‘‘Sec. 225. Cross references.’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions for taxable years 
beginning after December 31, 2013. 
Æ 
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