(1) by inserting ‘‘OR HOUSING’’ after ‘‘RETIRE-
MENT’’ in the heading of such paragraph; and
(2) by inserting before the period at the end the
following: ‘‘and the deduction allowed by section 222
(relating to deduction of certain payments to home-
ownership plans)’’.
(c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973
of such Code (relating to tax on excess contributions to
individual retirement accounts, medical savings accounts,
certain section 403(b) contracts, and certain individual re-
tirement annuities) is amended—
(1) by inserting ‘‘HOMEOWNERSHIP PLANS,’’
after ‘‘ACCOUNTS’’, the second place it appears in
the heading of such section;
(2) by redesignating paragraphs (3) and (4) of
subsection (a) as paragraphs (4) and (5) of such
subsection, respectively, and by inserting after para-
graph (2) the following:
‘‘(3) a homeownership plan (within the meaning
of section 222(c)),’’;
(3) by striking ‘‘or’’ at the end of paragraph
(1) of subsection (a); and
(4) by adding at the end the following new sub-
section:
‘‘(g) EXCESS CONTRIBUTIONS TO HOMEOWNERSHIP
PLANS.—For purposes of this section, in the case of a
homeownership plan (within the meaning of section
222((c)(1)), the term ‘excess contributions’ means the
amount by which the amount contributed for the taxable
year to the plan exceeds the amount allowable as a deduc-
tion under section 222 for such taxable year.’’
(d) TAX ON PROHIBITED TRANSACTIONS.—Section
4975 of such Code (relating to tax on prohibited trans-
actions) is amended—
(1) by adding at the end of subsection (c) the
following new paragraph:
‘‘(6) SPECIAL
RULE
FOR
HOMEOWNERSHIP
PLANS.—An individual for whose benefit a home-
ownership plan is established shall be exempt from
the tax imposed by this section with respect to any
transaction concerning such plan (which would oth-
erwise be taxable under this section) if, with respect
to such transaction, the plan ceases to be a home-
ownership plan by reason of the application of sec-
tion 222(e)(2)(A) or if section 222(e)(3) applies to
such plan.’’; and
(2) by striking ‘‘or’’ at the end of subparagraph
(E), by redesignating subparagraph (F) as subpara-
graph (G) and inserting after subparagraph (E) the
following new subparagraph:
‘‘(F) a homeownership plan described in
section 222(c), or’’.
(e) FAILURE TO PROVIDE REPORTS
ON HOME-
OWNERSHIP PLANS.—Paragraph (2) of section 6693(a) of
such Code (relating to failure to provide reports on certain
tax-favored accounts or annuities; penalties relating to
designated nondeductible contributions) is amended by
striking ‘‘and’’ at the end of subparagraph (C), by striking
the period at the end of subparagraph (D) and inserting
‘‘, and’’, and by inserting after subparagraph (D) to fol-
lowing new subparagraph:
‘‘(E) section 222(i) (relating to home-
ownership plans).’’
(f) CLERICAL AMENDMENTS.—
(1) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the item relating to section 222 and insert-
ing the following:
‘‘Sec. 222. Homeownership plans.
‘‘Sec. 223. Cross Reference.’’
(2) The table of sections for chapter 43 of such
Code is amended by striking the item relating to sec-
tion 4973 and inserting the following:
‘‘Sec. 4973. Tax on excess contributions to individual retirement
accounts, homeownership plans, certain 403(b) con-
tracts, and certain individual retirement annuities.’’
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1997.
Æ