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103D CONGRESS
1ST SESSION
H. R. 1060
To amend the Internal Revenue Code of 1986 to extend the period for
the rollover of gain on the sale of a principal residence for the period
the taxpayer has substantial frozen deposits in a financial institution.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 23, 1993
Mr. REED 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 extend
the period for the rollover of gain on the sale of a
principal residence for the period the taxpayer has sub-
stantial frozen deposits in a financial institution.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. EXTENSION OF TIME FOR PURCHASE OF NEW
RESIDENCE UNDER SECTION 1034.
(a) GENERAL RULE.—Section 1034 of the Internal
Revenue Code of 1986 (relating to rollover of gain on sale
of principal residence) is amended by redesignating sub-
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section (l) as subsection (m) and by inserting after sub-
section (k) the following new subsection:
‘‘(l) EXTENSION WHERE TAXPAYER HAS SUBSTAN-
TIAL FROZEN DEPOSITS.—
‘‘(1) IN GENERAL.—The running of any period
of time specified in subsection (a) or (c) (other than
the 2 years referred to in subsection (c)(4)) shall be
suspended during any time that the taxpayer has
substantial frozen deposits after the date of the sale
of the old residence; except that any such period of
time as so suspended shall not extend beyond the
date 5 years after the date of the sale of the old res-
idence.
‘‘(2) SUBSTANTIAL
FROZEN
DEPOSITS.—For
purposes of this subsection—
‘‘(A) IN GENERAL.—A taxpayer shall be
treated as having substantial frozen deposits for
any period during which the aggregate frozen
deposits of the taxpayer exceed 50 percent of
the net amount realized from the sale of the old
residence.
‘‘(B) FROZEN DEPOSIT.—The term ‘frozen
deposit’ means deposit in a financial institution
if such deposit may not be withdrawn (during
a period of at least 5 days) because of—
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‘‘(i) the bankruptcy or insolvency of a
financial institution, or
‘‘(ii) any requirement imposed by the
State in which such institution is located
by reason of the bankruptcy or insolvency
(or threat thereof) of 1 or more financial
institutions in such State.
‘‘(C) NET
AMOUNT
REALIZED.—The net
amount realized from the sale of the old resi-
dence is the amount realized from the sale of
the old residence reduced—
‘‘(i) as provided in subsection (b)(1),
and
‘‘(ii) by the amount of any indebted-
ness of the taxpayer which was secured by
the old residence.
‘‘(3) TREATMENT OF MARRIED INDIVIDUALS.—
If the old residence and the new residence are each
used by the taxpayer and the spouse of the taxpayer
as their principal residence, such individuals shall be
treated as one taxpayer for purposes of this sub-
section.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to—
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(1) any residence sold or exchanged after De-
cember 31, 1990, and
(2) any residence sold or exchanged on or be-
fore such date if the period specified in section
1034(a) of the Internal Revenue Code of 1986
(without regard to the amendment made by sub-
section (a)) has not expired before January 1, 1991.
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