IB 
Union Calendar No. 377 
110TH CONGRESS 
2D SESSION 
H. R. 5720 
[Report No. 110–606] 
To amend the Internal Revenue Code of 1986 to provide assistance for 
housing. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 8, 2008 
Mr. RANGEL (for himself, Mr. MCDERMOTT, Mr. LEWIS of Georgia, Mr. POM-
EROY, Mr. THOMPSON of California, Mr. EMANUEL, Mr. BLUMENAUER, 
Ms. BERKLEY, Mr. CROWLEY, Mr. ELLISON, Ms. GIFFORDS, Mr. JOHN-
SON of Georgia, Mr. MAHONEY of Florida, Mr. RODRIGUEZ, Ms. SHEA- 
PORTER, Mr. SIRES, Mr. WELCH of Vermont, and Mrs. JONES of Ohio) 
introduced the following bill; which was referred to the Committee on 
Ways and Means 
APRIL 24, 2008 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on April 8, 2008] 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
assistance for housing. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Housing Assistance Tax Act of 2008’’. 
(b) AMENDMENT OF 1986 CODE.—Except as otherwise 
expressly provided, whenever in this Act an amendment or 
repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of this 
Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—HOUSING TAX INCENTIVES 
Subtitle A—Multi-Family Housing 
PART 1—LOW-INCOME HOUSING TAX CREDIT 
Sec. 101. Temporary increase in volume cap for low-income housing tax credit. 
Sec. 102. Determination of credit rate. 
Sec. 103. Modifications to definition of eligible basis. 
Sec. 104. Other simplification and reform of low-income housing tax incentives. 
PART 2—MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES 
Sec. 111. Recycling of tax-exempt debt for financing residential rental projects. 
Sec. 112. Coordination of certain rules applicable to low-income housing credit 
and qualified residential rental project exempt facility bonds. 
PART 3—REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND 
TAX-EXEMPT HOUSING BONDS 
Sec. 121. Hold harmless for reductions in area median gross income. 
Sec. 122. Exception to annual current income determination requirement where 
determination not relevant. 
Subtitle B—Single Family Housing 
Sec. 131. First-time homebuyer credit. 
Sec. 132. Additional standard deduction for real property taxes for nonitemizers. 
Subtitle C—General Provisions 
Sec. 141. Temporary liberalization of tax-exempt housing bond rules. 
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Sec. 142. Repeal of alternative minimum tax limitations on tax-exempt housing 
bonds, low-income housing tax credit, and rehabilitation credit. 
Sec. 143. Bonds guaranteed by Federal home loan banks eligible for treatment as 
tax-exempt bonds. 
Sec. 144. Modification of rules pertaining to FIRPTA nonforeign affidavits. 
Sec. 145. Modification of definition of tax-exempt use property for purposes of the 
rehabilitation credit. 
TITLE II—REFORMS RELATED TO REAL ESTATE INVESTMENT 
TRUSTS 
Subtitle A—Foreign Currency and Other Qualified Activities 
Sec. 201. Revisions to REIT income tests. 
Sec. 202. Revisions to REIT asset tests. 
Sec. 203. Conforming foreign currency revisions. 
Subtitle B—Taxable REIT Subsidiaries 
Sec. 211. Conforming taxable REIT subsidiary asset test. 
Subtitle C—Dealer Sales 
Sec. 221. Holding period under safe harbor. 
Sec. 222. Determining value of sales under safe harbor. 
Subtitle D—Health Care REITs 
Sec. 231. Conformity for health care facilities. 
Subtitle E—Effective Dates 
Sec. 241. Effective dates. 
TITLE III—REVENUE PROVISIONS 
Sec. 301. Broker reporting of customer’s basis in securities transactions. 
Sec. 302. Delay in application of worldwide allocation of interest. 
Sec. 303. Time for payment of corporate estimated taxes. 
TITLE I—HOUSING TAX 
INCENTIVES 
Subtitle A—Multi-Family Housing 
PART 1—LOW-INCOME HOUSING TAX CREDIT 
SEC. 101. TEMPORARY INCREASE IN VOLUME CAP FOR LOW- 
INCOME HOUSING TAX CREDIT. 
Paragraph (3) of section 42(h) is amended by adding 
at the end the following new subparagraph: 
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‘‘(I) INCREASE IN STATE HOUSING CREDIT 
CEILING FOR 2008 AND 2009.—In the case of cal-
endar years 2008 and 2009, the dollar amount 
in effect under subparagraph (C)(ii)(I) for such 
calendar year (after any increase under subpara-
graph (H)) shall be increased by $0.20.’’. 
SEC. 102. DETERMINATION OF CREDIT RATE. 
(a) ELIMINATION OF DISTINCTION BETWEEN NEW AND 
EXISTING BUILDINGS; MINIMUM CREDIT RATE FOR NON- 
FEDERALLY SUBSIDIZED BUILDINGS.— 
(1) IN GENERAL.—Subsection (b) section 42 is 
amended to read as follows: 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of this 
section— 
‘‘(1) IN
GENERAL.—The term ‘applicable per-
centage’ means, with respect to any building, the ap-
propriate percentage prescribed by the Secretary for 
the earlier of— 
‘‘(A) the month in which such building is 
placed in service, or 
‘‘(B) at the election of the taxpayer— 
‘‘(i) the month in which the taxpayer 
and the housing credit agency enter into an 
agreement with respect to such building 
(which is binding on such agency, the tax-
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payer, and all successors in interest) as to 
the housing credit dollar amount to be allo-
cated to such building, or 
‘‘(ii) in the case of any building to 
which subsection (h)(4)(B) applies, the 
month in which the tax-exempt obligations 
are issued. 
A month may be elected under clause (ii) only if the 
election is made not later than the 5th day after the 
close of such month. Such an election, once made, 
shall be irrevocable. 
‘‘(2) METHOD OF PRESCRIBING PERCENTAGES.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the percentages prescribed by the Sec-
retary for any month shall be— 
‘‘(i) in the case of any building which 
is not federally subsidized for the taxable 
year, the greater of— 
‘‘(I) the average percentage deter-
mined under subclause (II) for months 
in the preceding calendar year, or 
‘‘(II) the percentage which will 
yield over a 10-year period amounts of 
credit under subsection (a) which have 
a present value equal to 70 percent of 
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the qualified basis of such building, 
and 
‘‘(ii) in the case of any other building, 
the percentage which will yield over a 10- 
year period amounts of credit under sub-
section (a) which have a present value equal 
to 30 percent of the qualified basis of such 
building. 
‘‘(B) 
METHOD
OF
DISCOUNTING.—The 
present value under subparagraph (A) shall be 
determined— 
‘‘(i) as of the last day of the 1st year 
of the 10-year period referred to in subpara-
graph (A), 
‘‘(ii) by using a discount rate equal to 
72 percent of the average of the annual Fed-
eral mid-term rate and the annual Federal 
long-term rate applicable under section 
1274(d)(1) to the month applicable under 
subparagraph (A) and compounded annu-
ally, and 
‘‘(iii) by assuming that the credit al-
lowable under this section for any year is 
received on the last day of such year. 
‘‘(3) CROSS REFERENCES.— 
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‘‘(A) For treatment of certain rehabilitation 
expenditures as separate buildings, see subsection 
(e). 
‘‘(B) For determination of applicable per-
centage for increases in qualified basis after the 
1st year of the credit period, see subsection (f)(3). 
‘‘(C) For authority of housing credit agency 
to limit applicable percentage and qualified 
basis which may be taken into account under 
this section with respect to any building, see sub-
section (h)(7).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (B) of section 42(e)(3) is 
amended by striking ‘‘subsection (b)(2)(B)(ii)’’ 
and inserting ‘‘subsection (b)(2)(A)(ii)’’. 
(B) Subparagraph (A) of section 42(i)(2) is 
amended by striking ‘‘new building’’ and insert-
ing ‘‘building’’. 
(b) MODIFICATIONS TO DEFINITION OF FEDERALLY 
SUBSIDIZED BUILDING.— 
(1) IN GENERAL.—Subparagraph (A) of section 
42(i)(2) is amended by striking ‘‘, or any below mar-
ket Federal loan,’’. 
(2) CONFORMING AMENDMENTS.— 
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(A) Subparagraph (B) of section 42(i)(2) is 
amended— 
(i) by striking ‘‘BALANCE OF LOAN OR’’ 
in the heading thereof, 
(ii) by striking ‘‘loan or’’ in the matter 
preceding clause (i), and 
(iii) by striking ‘‘subsection (d)—’’ 
and all that follows and inserting ‘‘sub-
section (d) the proceeds of such obligation.’’. 
(B) Subparagraph (C) of section 42(i)(2) is 
amended— 
(i) by striking ‘‘or below market Fed-
eral loan’’ in the matter preceding clause 
(i), 
(ii) in clause (i)— 
(I) by striking ‘‘or loan (when 
issued or made)’’ and inserting ‘‘(when 
issued)’’, and 
(II) by striking ‘‘the proceeds of 
such obligation or loan’’ and inserting 
‘‘the proceeds of such obligation’’, and 
(iii) by striking ‘‘, and such loan is re-
paid,’’ in clause (ii). 
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(C) Paragraph (2) of section 42(i) is 
amended by striking subparagraphs (D) and 
(E). 
(c) EFFECTIVE DATE.—The amendments made by this 
subsection shall apply to buildings placed in service after 
the date of the enactment of this Act. 
SEC. 103. MODIFICATIONS TO DEFINITION OF ELIGIBLE 
BASIS. 
(a) INCREASE IN CREDIT FOR CERTAIN STATE DES-
IGNATED
BUILDINGS.—Subparagraph 
(C) 
of 
section 
42(d)(5) (relating to increase in credit for buildings in high 
cost areas), before redesignation under subsection (f), is 
amended by adding at the end the following new clause: 
‘‘(v) 
BUILDINGS
DESIGNATED
BY 
STATE
HOUSING
CREDIT
AGENCY.—Any 
building which is designated by the State 
housing credit agency as requiring the in-
crease in credit under this subparagraph in 
order for such building to be financially fea-
sible as part of a qualified low-income hous-
ing project shall be treated for purposes of 
this subparagraph as located in a difficult 
development area which is designated for 
purposes of this subparagraph. The pre-
ceding sentence shall not apply to any 
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building if paragraph (1) of subsection (h) 
does not apply to any portion of the eligible 
basis of such building by reason of para-
graph (4) of such subsection.’’. 
(b) MODIFICATION
TO REHABILITATION REQUIRE-
MENTS.— 
(1) 
IN
GENERAL.—Clause 
(ii) 
of 
section 
42(e)(3)(A) is amended— 
(A) by striking ‘‘10 percent’’ in subclause 
(I) and inserting ‘‘20 percent’’, and 
(B) by striking ‘‘$3,000’’ in subclause (II) 
and inserting ‘‘$6,000’’. 
(2) INFLATION ADJUSTMENT.—Paragraph (3) of 
section 42(e) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) INFLATION ADJUSTMENT.—In the case 
of any expenditures which are treated under 
paragraph (4) as placed in service during any 
calendar year after 2009, the $6,000 amount in 
subparagraph (A)(ii)(II) 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 such cal-
endar year by substituting ‘calendar year 
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2008’ for ‘calendar year 1992’ in subpara-
graph (B) thereof. 
Any increase under the preceding sentence which 
is not a multiple of $100 shall be rounded to the 
nearest multiple of $100.’’. 
(3) CONFORMING
AMENDMENT.—Subclause (II) 
of section 42(f)(5)(B)(ii) is amended by striking ‘‘if 
subsection (e)(3)(A)(ii)(II)’’ and all that follows and 
inserting ‘‘if the dollar amount in effect under sub-
section (e)(3)(A)(ii)(II) were two-thirds of such 
amount.’’. 
(c) INCREASE IN ALLOWABLE COMMUNITY SERVICE 
FACILITY SPACE FOR SMALL PROJECTS.—Clause (ii) of sec-
tion 42(d)(4)(C) (relating to limitation) is amended by 
striking ‘‘10 percent of the eligible basis of the qualified low- 
income housing project of which it is a part. For purposes 
of’’ and inserting ‘‘the sum of— 
‘‘(I) 15 percent of so much of the 
eligible basis of the qualified low-in-
come housing project of which it is a 
part as does not exceed $5,000,000, 
plus 
‘‘(II) 10 percent of so much of the 
eligible basis of such project as is not 
taken into account under subclause (I). 
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For purposes of’’. 
(d) CLARIFICATION
OF TREATMENT
OF FEDERAL 
GRANTS.—Subparagraph (A) of section 42(d)(5) is amend-
ed to read as follows: 
‘‘(A) FEDERAL
GRANTS
NOT
TAKEN
INTO 
ACCOUNT
IN
DETERMINING
ELIGIBLE
BASIS.— 
The eligible basis of a building shall not include 
any costs financed with the proceeds of a Feder-
ally funded grant.’’. 
(e) SIMPLIFICATION OF RELATED PARTY RULES.— 
Clause (iii) of section 42(d)(2)(D), before redesignation 
under subsection (f)(2), is amended— 
(1) by striking all that precedes subclause (II), 
(2) by redesignating subclause (II) as clause (iii) 
and moving such clause two ems to the left, and 
(3) by striking the last sentence thereof. 
(f) REPEAL OF DEADWOOD.— 
(1) Clause (ii) of section 42(d)(2)(B) is amended 
by striking ‘‘the later of—’’ and all that follows and 
inserting ‘‘the date the building was last placed in 
service,’’. 
(2) Subparagraph (D) of section 42(d)(2) is 
amended by striking clause (i) and by redesignating 
clauses (ii) and (iii) as clauses (i) and (ii), respec-
tively. 
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(3) Paragraph (5) of section 42(d) is amended 
by striking subparagraph (B) and by redesignating 
subparagraph (C) as subparagraph (B). 
(g) EFFECTIVE DATE.—The amendments made by this 
subsection shall apply to buildings placed in service after 
the date of the enactment of this Act. 
SEC. 104. OTHER SIMPLIFICATION AND REFORM OF LOW-IN-
COME HOUSING TAX INCENTIVES. 
(a) REPEAL PROHIBITION ON MODERATE REHABILI-
TATION ASSISTANCE.—Paragraph (2) of section 42(c) (de-
fining qualified low-income building) is amended by strik-
ing the flush sentence at the end. 
(b) MODIFICATION OF TIME LIMIT FOR INCURRING 10 
PERCENT
OF PROJECT’S COST.—Clause (ii) of section 
42(h)(1)(E) is amended by striking ‘‘(as of the later of the 
date which is 6 months after the date that the allocation 
was made or the close of the calendar year in which the 
allocation is made)’’ and inserting ‘‘(as of the date which 
is 1 year after the date that the allocation was made)’’. 
(c) REPEAL OF BONDING REQUIREMENT ON DISPOSI-
TION OF BUILDING.—Paragraph (6) of section 42(j) (relat-
ing to no recapture on disposition of building (or interest 
therein) where bond posted) is amended to read as follows: 
‘‘(6) NO RECAPTURE ON DISPOSITION OF BUILD-
ING WHICH CONTINUES IN QUALIFIED USE.— 
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‘‘(A) IN
GENERAL.—The increase in tax 
under this subsection shall not apply solely by 
reason of the disposition of a building (or an in-
terest therein) if it is reasonably expected that 
such building will continue to be operated as a 
qualified low-income building for the remaining 
compliance period with respect to such building. 
‘‘(B) STATUTE
OF
LIMITATIONS.—If a 
building (or an interest therein) is disposed of 
during any taxable year and there is any reduc-
tion in the qualified basis of such building which 
results in an increase in tax under this sub-
section for such taxable or any subsequent tax-
able year, then— 
‘‘(i) the statutory period for the assess-
ment of any deficiency with respect to such 
increase in tax shall not expire before the 
expiration of 3 years from the date the Sec-
retary is notified by the taxpayer (in such 
manner as the Secretary may prescribe) of 
such reduction in qualified basis, and 
‘‘(ii) such deficiency may be assessed 
before the expiration of such 3-year period 
notwithstanding the provisions of any other 
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law or rule of law which would otherwise 
prevent such assessment.’’. 
(d) ENERGY EFFICIENCY
AND HISTORIC NATURE 
TAKEN INTO ACCOUNT IN MAKING ALLOCATIONS.—Sub-
paragraph (C) of section 42(m)(1) (relating to plans for 
allocation of credit among projects) is amended by striking 
‘‘and’’ at the end of clause (vii), by striking the period at 
the end of clause (viii) and inserting a comma, and by add-
ing at the end the following new clauses: 
‘‘(ix) the energy efficiency of the 
project, and 
‘‘(x) the historic nature of the project.’’. 
(e) CONTINUED ELIGIBILITY FOR STUDENTS WHO RE-
CEIVED FOSTER CARE ASSISTANCE.—Clause (i) of section 
42(i)(3)(D) is amended by striking ‘‘or’’ at the end of sub-
clause (I), by redesignating subclause (II) as subclause 
(III), and by inserting after subclause (I) the following new 
subclause: 
‘‘(II) a student who was pre-
viously under the care and placement 
responsibility of the State agency re-
sponsible for administering a plan 
under part B or part E of title IV of 
the Social Security Act, or’’. 
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(f) TREATMENT OF RURAL PROJECTS.—Section 42(i) 
(relating to definitions and special rules) is amended by 
adding at the end the following new paragraph: 
‘‘(8) TREATMENT
OF
RURAL
PROJECTS.—For 
purposes of this section, in the case of any project for 
residential rental property located in a rural area (as 
defined in section 520 of the Housing Act of 1949), 
any income limitation measured by reference to area 
median gross income shall be measured by reference 
to the greater of area median gross income or na-
tional non-metropolitan median income. The pre-
ceding sentence shall not apply with respect to any 
building if paragraph (1) of section 42(h) does not 
apply by reason of paragraph (4) thereof to any por-
tion of the credit determined under this section with 
respect to such building.’’. 
(g) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to buildings placed in service after 
the date of the enactment of this Act. 
(2) REPEAL OF BONDING REQUIREMENT ON DIS-
POSITION OF BUILDING.—The amendment made by 
subsection (c) shall apply to— 
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(A) interests in buildings disposed after the 
date of the enactment of this Act, and 
(B) interests in buildings disposed of on or 
before such date if— 
(i) it is reasonably expected that such 
building will continue to be operated as a 
qualified low-income building (within the 
meaning of section 42 of the Internal Rev-
enue Code of 1986) for the remaining com-
pliance period (within the meaning of such 
section) with respect to such building, and 
(ii) the taxpayer elects the application 
of this subparagraph with respect to such 
disposition. 
Notwithstanding the preceding sentence, the amend-
ments made by subsection (c) shall not apply to any 
disposition after the date 5 years after the date of the 
enactment of this Act. 
(3) ENERGY EFFICIENCY AND HISTORIC NATURE 
TAKEN INTO ACCOUNT IN MAKING ALLOCATIONS.—The 
amendments made by subsection (d) shall apply to al-
locations made after December 31, 2008. 
(4) CONTINUED ELIGIBILITY FOR STUDENTS WHO 
RECEIVED FOSTER CARE ASSISTANCE.—The amend-
ments made by subsection (e) shall apply to deter-
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minations made after the date of the enactment of this 
Act. 
(5) TREATMENT
OF
RURAL
PROJECTS.—The 
amendment made by subsection (f) shall apply to de-
terminations made after the date of the enactment of 
this Act. 
PART 2—MODIFICATIONS TO TAX-EXEMPT 
HOUSING BOND RULES 
SEC. 111. RECYCLING OF TAX-EXEMPT DEBT FOR FINANC-
ING RESIDENTIAL RENTAL PROJECTS. 
(a) IN GENERAL.—Subsection (i) of section 146 (relat-
ing to treatment of refunding issues) is amended by adding 
at the end the following new paragraph: 
‘‘(6) TREATMENT
OF
CERTAIN
RESIDENTIAL 
RENTAL PROJECT BONDS AS REFUNDING BONDS IRRE-
SPECTIVE OF OBLIGOR.— 
‘‘(A) IN GENERAL.—If, during the 6-month 
period beginning on the date of a repayment of 
a loan financed by an issue 95 percent or more 
of the net proceeds of which are used to provide 
projects described in section 142(d), such repay-
ment is used to provide a new loan for any 
project so described, any bond which is issued to 
refinance such issue shall be treated as a refund-
ing issue to the extent the principal amount of 
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such refunding issue does not exceed the prin-
cipal amount of the bonds refunded. 
‘‘(B) 
LIMITATIONS.—Subparagraph 
(A) 
shall apply to only one refunding of the original 
issue and only if— 
‘‘(i) the refunding issue is issued not 
later than 4 years after the date on which 
the original issue was issued, 
‘‘(ii) the latest maturity date of any 
bond of the refunding issue is not later than 
34 years after the date on which the re-
funded bond was issued, and 
‘‘(iii) the refunding issue is approved 
in accordance with section 147(f) before the 
issuance of the refunding issue.’’. 
(b) LOW-INCOME HOUSING CREDIT.—Clause (ii) of 
section 42(h)(4)(A) is amended by inserting ‘‘or such fi-
nancing is refunded as described in section 146(i)(6)’’ before 
the period at the end. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to repayments of loans received after the 
date of the enactment of this Act. 
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SEC. 112. COORDINATION OF CERTAIN RULES APPLICABLE 
TO 
LOW-INCOME 
HOUSING 
CREDIT 
AND 
QUALIFIED RESIDENTIAL RENTAL PROJECT 
EXEMPT FACILITY BONDS. 
(a) DETERMINATION OF NEXT AVAILABLE UNIT.— 
Paragraph (3) of section 142(d) (relating to current income 
determinations) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) EXCEPTION FOR PROJECTS WITH RE-
SPECT TO WHICH AFFORDABLE HOUSING CREDIT 
IS ALLOWED.—In the case of a project with re-
spect to which credit is allowed under section 42, 
the second sentence of subparagraph (B) shall be 
applied by substituting ‘building (within the 
meaning of section 42)’ for ‘project’.’’. 
(b) STUDENTS.—Paragraph (2) of section 142(d) (re-
lating to definitions and special rules) is amended by add-
ing at the end the following new subparagraph: 
‘‘(C) STUDENTS.—Rules similar to the rules 
of 42(i)(3)(D) shall apply for purposes of this 
subsection.’’. 
(c) SINGLE-ROOM OCCUPANCY UNITS.—Paragraph (2) 
of section 142(d) (relating to definitions and special rules), 
as amended by subsection (b), is further amended by adding 
at the end the following new subparagraph: 
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‘‘(D) SINGLE-ROOM OCCUPANCY UNITS.—A 
unit shall not fail to be treated as a residential 
unit merely because such unit is a single-room 
occupancy unit (within the meaning of section 
42).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to determinations of the status of quali-
fied residential rental projects for periods beginning after 
the date of the enactment of this Act, with respect to bonds 
issued before, on, or after such date. 
PART 3—REFORMS RELATED TO THE LOW-IN-
COME HOUSING CREDIT AND TAX-EXEMPT 
HOUSING BONDS 
SEC. 121. HOLD HARMLESS FOR REDUCTIONS IN AREA ME-
DIAN GROSS INCOME. 
(a) IN GENERAL.—Paragraph (2) of section 142(d), as 
amended by section 112, is further amended by adding at 
the end the following new subparagraph: 
‘‘(E) HOLD HARMLESS FOR REDUCTIONS IN 
AREA MEDIAN GROSS INCOME.— 
‘‘(i) IN GENERAL.—Any determination 
of area median gross income under sub-
paragraph (B) with respect to any project 
for any calendar year after 2008 shall not 
be less than the area median gross income 
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determined under such subparagraph with 
respect to such project for the calendar year 
preceding the calendar year for which such 
determination is made. 
‘‘(ii) SPECIAL RULE FOR CERTAIN CEN-
SUS CHANGES.—In the case of a HUD hold 
harmless impacted project, the area median 
gross income with respect to such project for 
any calendar year after 2008 (hereafter in 
this clause referred to as the current cal-
endar year) shall be the greater of the 
amount determined without regard to this 
clause or the sum of— 
‘‘(I) the area median gross income 
determined under the HUD hold harm-
less policy with respect to such project 
for calendar year 2008, plus 
‘‘(II) any increase in the area me-
dian gross income determined under 
subparagraph (B) (determined without 
regard to the HUD hold harmless pol-
icy and this subparagraph) with re-
spect to such project for the current 
calendar year over the area median 
gross income (as so determined) with 
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respect to such project for calendar 
year 2008. 
‘‘(iii) HUD HOLD
HARMLESS
POL-
ICY.—The term ‘HUD hold harmless policy’ 
means the regulations under which a policy 
similar to the rules of clause (i) applied to 
prevent a change in the method of deter-
mining area median gross income from re-
sulting in a reduction in the area median 
gross income determined with respect to cer-
tain projects in calendar years 2007 and 
2008. 
‘‘(iv) HUD 
HOLD
HARMLESS
IM-
PACTED
PROJECT.—The term ‘HUD hold 
harmless impacted project’ means any 
project with respect to which area median 
gross income was determined under sub-
paragraph (B) for calendar year 2007 or 
2008 if such determination would have been 
less but for the HUD hold harmless policy.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to determinations of area median gross 
income for calendar years after 2008. 
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SEC. 122. EXCEPTION TO ANNUAL CURRENT INCOME DE-
TERMINATION REQUIREMENT WHERE DETER-
MINATION NOT RELEVANT. 
(a) IN
GENERAL.—Subparagraph (A) of section 
142(d)(3) is amended by adding at the end the following 
new sentence: ‘‘The preceding sentence shall not apply with 
respect to any project for any year if during such year no 
residential unit in the project is occupied by a new resident 
whose income exceeds the applicable income limit.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to years ending after the date of the en-
actment of this Act. 
Subtitle B—Single Family Housing 
SEC. 131. FIRST-TIME HOMEBUYER CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of subchapter 
A of chapter 1 is amended by redesignating section 36 as 
section 37 and by inserting after section 35 the following 
new section: 
‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual who is a first-time homebuyer of a principal resi-
dence in the United States during a taxable year, there shall 
be allowed as a credit against the tax imposed by this sub-
title for such taxable year an amount equal to 10 percent 
of the purchase price of the residence. 
‘‘(b) LIMITATIONS.— 
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‘‘(1) DOLLAR LIMITATION.— 
‘‘(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the credit allowed 
under subsection (a) shall not exceed $7,500. 
‘‘(B) MARRIED INDIVIDUALS FILING SEPA-
RATELY.—In the case of a married individual 
filing a separate return, subparagraph (A) shall 
be applied by substituting ‘$3,750’ for ‘$7,500’. 
‘‘(C) OTHER INDIVIDUALS.—If two or more 
individuals who are not married purchase a 
principal residence, the amount of the credit al-
lowed under subsection (a) shall be allocated 
among such individuals in such manner as the 
Secretary may prescribe, except that the total 
amount of the credits allowed to all such individ-
uals shall not exceed $7,500. 
‘‘(2) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a credit under subsection (a) (determined 
without regard to this paragraph) for the taxable 
year shall be reduced (but not below zero) by the 
amount which bears the same ratio to the 
amount which is so allowable as— 
‘‘(i) the excess (if any) of— 
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‘‘(I) the taxpayer’s modified ad-
justed gross income for such taxable 
year, over 
‘‘(II) $70,000 ($140,000 in the 
case of a joint return), bears to 
‘‘(ii) $20,000. 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A), the 
term ‘modified adjusted gross income’ means the 
adjusted gross income of the taxpayer for the tax-
able year increased by any amount excluded 
from gross income under section 911, 931, or 
933. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) FIRST-TIME HOMEBUYER.—The term ‘first- 
time homebuyer’ means any individual if such indi-
vidual (and if married, such individual’s spouse) had 
no present ownership interest in a principal residence 
during the 3-year period ending on the date of the 
purchase of the principal residence to which this sec-
tion applies. 
‘‘(2) PRINCIPAL
RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(3) PURCHASE.— 
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‘‘(A) IN
GENERAL.—The term ‘purchase’ 
means any acquisition, but only if— 
‘‘(i) the property is not acquired from 
a person related to the person acquiring it, 
and 
‘‘(ii) the basis of the property in the 
hands of the person acquiring it is not de-
termined— 
‘‘(I) in whole or in part by ref-
erence to the adjusted basis of such 
property in the hands of the person 
from whom acquired, or 
‘‘(II) under section 1014(a) (relat-
ing to property acquired from a dece-
dent). 
‘‘(B) CONSTRUCTION.—A residence which is 
constructed by the taxpayer shall be treated as 
purchased by the taxpayer on the date the tax-
payer first occupies such residence. 
‘‘(4) PURCHASE
PRICE.—The term ‘purchase 
price’ means the adjusted basis of the principal resi-
dence on the date such residence is purchased. 
‘‘(5) RELATED
PERSONS.—A person shall be 
treated as related to another person if the relationship 
between such persons would result in the disallowance 
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of losses under section 267 or 707(b) (but, in applying 
section 267(b) and (c) for purposes of this section, 
paragraph (4) of section 267(c) shall be treated as 
providing that the family of an individual shall in-
clude only his spouse, ancestors, and lineal descend-
ants). 
‘‘(d) EXCEPTIONS.—No credit under subsection (a) 
shall be allowed to any taxpayer for any taxable year with 
respect to the purchase of a residence if— 
‘‘(1) a credit under section 1400C (relating to 
first-time homebuyer in the District of Columbia) is 
allowable to the taxpayer (or the taxpayer’s spouse) 
for such taxable year or any prior taxable year, 
‘‘(2) the residence is financed by the proceeds of 
a qualified mortgage issue the interest on which is ex-
empt from tax under section 103, 
‘‘(3) the taxpayer is a nonresident alien, or 
‘‘(4) the taxpayer disposes of such residence (or 
such residence ceases to be the principal residence of 
the taxpayer (and, if married, the taxpayer’s spouse)) 
before the close of such taxable year. 
‘‘(e) REPORTING.—If the Secretary requires informa-
tion reporting under section 6045 by a person described in 
subsection (e)(2) thereof to verify the eligibility of taxpayers 
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for the credit allowable by this section, the exception pro-
vided by section 6045(e) shall not apply. 
‘‘(f) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—Except as otherwise provided 
in this subsection, if a credit under subsection (a) is 
allowed to a taxpayer, the tax imposed by this chap-
ter shall be increased by 62⁄3 percent of the amount 
of such credit for each taxable year in the recapture 
period. 
‘‘(2) ACCELERATION OF RECAPTURE.—If a tax-
payer disposes of the principal residence with respect 
to which a credit was allowed under subsection (a) 
(or such residence ceases to be the principal residence 
of the taxpayer (and, if married, the taxpayer’s 
spouse)) before the end of the recapture period— 
‘‘(A) the tax imposed by this chapter for the 
taxable year of such disposition or cessation, 
shall be increased by the excess of the amount of 
the credit allowed over the amounts of tax im-
posed by paragraph (1) for preceding taxable 
years, and 
‘‘(B) paragraph (1) shall not apply with re-
spect to such credit for such taxable year or any 
subsequent taxable year. 
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‘‘(3) LIMITATION BASED ON GAIN.—In the case of 
the sale of the principal residence to a person who is 
not related to the taxpayer, the increase in tax deter-
mined under paragraph (2) shall not exceed the 
amount of gain (if any) on such sale. Solely for pur-
poses of the preceding sentence, the adjusted basis of 
such residence shall be reduced by the amount of the 
credit allowed under subsection (a) to the extent not 
previously recaptured under paragraph (1). 
‘‘(4) EXCEPTIONS.— 
‘‘(A) DEATH
OF
TAXPAYER.—Paragraphs 
(1) and (2) shall not apply to any taxable year 
ending after the date of the taxpayer’s death. 
‘‘(B) INVOLUNTARY
CONVERSION.—Para-
graph (2) shall not apply in the case of a resi-
dence which is compulsorily or involuntarily 
converted 
(within 
the 
meaning 
of 
section 
1033(a)) if the taxpayer acquires a new prin-
cipal residence during the 2-year period begin-
ning on the date of the disposition or cessation 
referred to in paragraph (2). Paragraph (2) 
shall apply to such new principal residence dur-
ing the recapture period in the same manner as 
if such new principal residence were the con-
verted residence. 
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‘‘(C) TRANSFERS BETWEEN SPOUSES OR IN-
CIDENT TO DIVORCE.—In the case of a transfer 
of a residence to which section 1041(a) applies— 
‘‘(i) paragraph (2) shall not apply to 
such transfer, and 
‘‘(ii) in the case of taxable years end-
ing after such transfer, paragraphs (1) and 
(2) shall apply to the transferee in the same 
manner as if such transferee were the trans-
feror (and shall not apply to the transferor). 
‘‘(5) JOINT RETURNS.—In the case of a credit al-
lowed under subsection (a) with respect to a joint re-
turn, half of such credit shall be treated as having 
been allowed to each individual filing such return for 
purposes of this subsection. 
‘‘(6) RECAPTURE PERIOD.—For purposes of this 
subsection, the term ‘recapture period’ means the 15 
taxable years beginning with the second taxable year 
following the taxable year in which the purchase of 
the principal residence for which a credit is allowed 
under subsection (a) was made. 
‘‘(g) APPLICATION OF SECTION.—This section shall 
only apply to a principal residence purchased by the tax-
payer on or after April 9, 2008, and before April 1, 2009.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 26(b)(2) is amended by striking 
‘‘and’’ at the end of subparagraph (U), by striking the 
period and inserting ‘‘, and’’ and the end of subpara-
graph (V), and by inserting after subparagraph (V) 
the following new subparagraph: 
‘‘(W) section 36(f) (relating to recapture of 
homebuyer credit).’’. 
(2) Section 6211(b)(4)(A) is amended by striking 
‘‘34,’’ and all that follows through ‘‘6428’’ and insert-
ing ‘‘34, 35, 36, 53(e), and 6428’’. 
(3) Section 1324(b)(2) of title 31, United States 
Code, is amended by inserting ‘‘, 36,’’ after ‘‘section 
35’’. 
(4) The table of sections for subpart C of part IV 
of subchapter A of chapter 1 is amended by redesig-
nating the item relating to section 36 as an item re-
lating to section 37 and by inserting before such item 
the following new item: 
‘‘Sec. 36. First-time homebuyer credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to residences purchased on or after April 
9, 2008, in taxable years ending on or after such date. 
SEC. 132. ADDITIONAL STANDARD DEDUCTION FOR REAL 
PROPERTY TAXES FOR NONITEMIZERS. 
(a) IN GENERAL.—Section 63(c)(1) (defining standard 
deduction) is amended by striking ‘‘and’’ at the end of sub-
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paragraph (A), by striking the period at the end of subpara-
graph (B) and inserting ‘‘, and’’, and by adding at the end 
the following new subparagraph: 
‘‘(C) in the case of any taxable year begin-
ning in 2008, the real property tax deduction.’’. 
(b) DEFINITION.—Section 63(c) is amended by adding 
at the end the following new paragraph: 
‘‘(7) REAL
PROPERTY
TAX
DEDUCTION.—For 
purposes of paragraph (1), the real property tax de-
duction is the lesser of— 
‘‘(A) the amount allowable as a deduction 
under this chapter for State and local taxes de-
scribed in section 164(a)(1), or 
‘‘(B) $350 ($700 in the case of a joint re-
turn). 
Any taxes taken into account under section 62(a) 
shall not be taken into account under this para-
graph.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2007. 
Subtitle C—General Provisions 
SEC. 141. TEMPORARY LIBERALIZATION OF TAX-EXEMPT 
HOUSING BOND RULES. 
(a) TEMPORARY INCREASE IN VOLUME CAP.— 
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(1) IN GENERAL.—Subsection (d) of section 146 
is amended by adding at the end the following new 
paragraph: 
‘‘(5) INCREASE AND SET ASIDE FOR HOUSING 
BONDS FOR 2008.— 
‘‘(A) INCREASE FOR 2008.—In the case of 
calendar year 2008, the State ceiling for each 
State shall be increased by an amount equal to 
$10,000,000,000 multiplied by a fraction— 
‘‘(i) the numerator of which is the pop-
ulation of such State, and 
‘‘(ii) the denominator of which is the 
total population of all States. 
‘‘(B) SET ASIDE.— 
‘‘(i) IN GENERAL.—Any amount of the 
State ceiling for any State which is attrib-
utable to an increase under this paragraph 
shall be allocated solely for one or more 
qualified housing issues. 
‘‘(ii) QUALIFIED HOUSING ISSUE.—For 
purposes of this paragraph, the term ‘quali-
fied housing issue’ means— 
‘‘(I) an issue described in section 
142(a)(7) (relating to qualified resi-
dential rental projects), or 
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‘‘(II) a qualified mortgage issue 
(determined by substituting ‘12-month 
period’ for ‘42-month period’ each 
place 
it 
appears 
in 
section 
143(a)(2)(D)(i)).’’. 
(2) CARRYFORWARD OF UNUSED LIMITATIONS.— 
Subsection (f) of section 146 is amended by adding at 
the end the following new paragraph: 
‘‘(6) SPECIAL RULES FOR INCREASED VOLUME 
CAP UNDER SUBSECTION (d)(5).—No amount which is 
attributable to the increase under subsection (d)(5) 
may be used— 
‘‘(A) for any issue other than a qualified 
housing issue (as defined in subsection (d)(5)), 
or 
‘‘(B) to issue any bond after calendar year 
2010.’’. 
(b) TEMPORARY RULE FOR USE OF QUALIFIED MORT-
GAGE BONDS PROCEEDS
FOR SUBPRIME REFINANCING 
LOANS.— 
(1) IN
GENERAL.—Section 143(k) (relating to 
other definitions and special rules) is amended by 
adding at the end the following new paragraph: 
‘‘(12) 
SPECIAL
RULES
FOR
SUBPRIME 
REFINANCINGS.— 
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‘‘(A) IN GENERAL.—Notwithstanding the re-
quirements of subsection (i)(1), the proceeds of a 
qualified mortgage issue may be used to refi-
nance a mortgage on a residence which was 
originally financed by the mortgagor through a 
qualified subprime loan. 
‘‘(B) SPECIAL
RULES.—In applying sub-
paragraph (A) to any refinancing— 
‘‘(i) subsection (a)(2)(D)(i) shall be ap-
plied by substituting ‘12-month period’ for 
‘42-month period’ each place it appears, 
‘‘(ii) subsection (d) (relating to 3-year 
requirement) shall not apply, and 
‘‘(iii) subsection (e) (relating to pur-
chase price requirement) shall be applied by 
using the market value of the residence at 
the time of refinancing in lieu of the acqui-
sition cost. 
‘‘(C) QUALIFIED
SUBPRIME
LOAN.—The 
term ‘qualified subprime loan’ means an adjust-
able rate single-family residential mortgage loan 
made after December 31, 2001, and before Janu-
ary 1, 2008, that the bond issuer determines 
would be reasonably likely to cause financial 
hardship to the borrower if not refinanced. 
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‘‘(D) TERMINATION.—This paragraph shall 
not apply to any bonds issued after December 
31, 2010.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to bonds issued after the date of the en-
actment of this Act. 
SEC. 142. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITA-
TIONS ON TAX-EXEMPT HOUSING BONDS, 
LOW-INCOME HOUSING TAX CREDIT, AND RE-
HABILITATION CREDIT. 
(a) TAX-EXEMPT INTEREST ON CERTAIN HOUSING 
BONDS EXEMPTED FROM ALTERNATIVE MINIMUM TAX.— 
(1) IN GENERAL.—Subparagraph (C) of section 
57(a)(5) (relating to specified private activity bonds) 
is amended by redesignating clauses (iii) and (iv) as 
clauses (iv) and (v), respectively, and by inserting 
after clause (ii) the following new clause: 
‘‘(iii) EXCEPTION FOR CERTAIN HOUS-
ING BONDS.—For purposes of clause (i), the 
term ‘private activity bond’ shall not in-
clude any bond issued after the date of the 
enactment of this clause if such bond is— 
‘‘(I) an exempt facility bond 
issued as part of an issue 95 percent or 
more of the net proceeds of which are 
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to be used to provide qualified residen-
tial rental projects (as defined in sec-
tion 142(d)), 
‘‘(II) a qualified mortgage bond 
(as defined in section 143(a)), or 
‘‘(III) a qualified veterans’ mort-
gage bond (as defined in section 
143(b)). 
The preceding sentence shall not apply to 
any refunding bond unless such preceding 
sentence applied to the refunded bond (or in 
the case of a series of refundings, the origi-
nal bond).’’. 
(2) NO
ADJUSTMENT
TO
ADJUSTED
CURRENT 
EARNINGS.—Subparagraph (B) of section 56(g)(4) is 
amended by adding at the end the following new 
clause: 
‘‘(iii) TAX EXEMPT INTEREST ON CER-
TAIN HOUSING BONDS.—Clause (i) shall not 
apply in the case of any interest on a bond 
to which section 57(a)(5)(C)(iii) applies.’’. 
(b) ALLOWANCE OF LOW-INCOME HOUSING CREDIT 
AGAINST ALTERNATIVE MINIMUM TAX.—Subparagraph (B) 
of section 38(c)(4) (relating to specified credits) is amended 
by redesignating clauses (ii) through (iv) as clauses (iii) 
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through (v) and inserting after clause (i) the following new 
clause: 
‘‘(ii) the credit determined under sec-
tion 42 to the extent attributable to build-
ings placed in service after December 31, 
2007,’’. 
(c) ALLOWANCE OF REHABILITATION CREDIT AGAINST 
ALTERNATIVE MINIMUM TAX.—Subparagraph (B) of sec-
tion 38(c)(4), as amended by subsection (b), is amended by 
striking ‘‘and’’ at the end of clause (iv), by redesignating 
clause (v) as clause (vi), and by inserting after clause (iv) 
the following new clause: 
‘‘(v) the credit determined under sec-
tion 47 to the extent attributable to quali-
fied rehabilitation expenditures properly 
taken into account for periods after Decem-
ber 31, 2007, and’’. 
(d) EFFECTIVE DATE.— 
(1) HOUSING
BONDS.—The amendments made 
by subsection (a) shall apply to bonds issued after the 
date of the enactment of this Act. 
(2) LOW INCOME HOUSING CREDIT.—The amend-
ments made by subsection (b) shall apply to credits 
determined under section 42 of the Internal Revenue 
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Code of 1986 to the extent attributable to buildings 
placed in service after December 31, 2007. 
(3) REHABILITATION CREDIT.—The amendments 
made by subsection (c) shall apply to credits deter-
mined under section 47 of the Internal Revenue Code 
of 1986 to the extent attributable to qualified rehabili-
tation expenditures properly taken into account for 
periods after December 31, 2007. 
SEC. 143. BONDS GUARANTEED BY FEDERAL HOME LOAN 
BANKS ELIGIBLE FOR TREATMENT AS TAX-EX-
EMPT BONDS. 
(a) IN
GENERAL.—Subparagraph (A) of section 
149(b)(3) (relating to exceptions for certain insurance pro-
grams) is amended by striking ‘‘or’’ at the end of clause 
(ii), by striking the period at the end of clause (iii) and 
inserting ‘‘, or’’ and by adding at the end the following new 
clause: 
‘‘(iv) any guarantee by a Federal home 
loan bank made in connection with the 
original issuance of a bond during the pe-
riod beginning on the date of the enactment 
of this Act and ending on December 31, 
2010 (or a renewal or extension of a guar-
antee so made).’’. 
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(b) SAFETY AND SOUNDNESS REQUIREMENTS.—Para-
graph (3) of section 149(b) is amended by adding at the 
end the following new subparagraph: 
‘‘(E) SAFETY
AND
SOUNDNESS
REQUIRE-
MENTS
FOR
FEDERAL
HOME
LOAN
BANKS.— 
Clause (iv) of subparagraph (A) shall not apply 
to any guarantee by a Federal home loan bank 
unless such bank meets safety and soundness col-
lateral requirements for such guarantees which 
are at least as stringent as such requirements 
which apply under regulations applicable to such 
guarantees by Federal home loan banks as in ef-
fect on April 9, 2008.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to guarantees made after the date of the 
enactment of this Act. 
SEC. 144. MODIFICATION OF RULES PERTAINING TO FIRPTA 
NONFOREIGN AFFIDAVITS. 
(a) IN GENERAL.—Subsection (b) of section 1445 (re-
lating to exemptions) is amended by adding at the end the 
following: 
‘‘(9) ALTERNATIVE PROCEDURE FOR FURNISHING 
NONFOREIGN
AFFIDAVIT.—For purposes of para-
graphs (2) and (7)— 
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‘‘(A) IN GENERAL.—Paragraph (2) shall be 
treated as applying to a transaction if, in con-
nection with a disposition of a United States 
real property interest— 
‘‘(i) the affidavit specified in para-
graph (2) is furnished to a qualified sub-
stitute, and 
‘‘(ii) the qualified substitute furnishes 
a statement to the transferee stating, under 
penalty of perjury, that the qualified sub-
stitute has such affidavit in his possession. 
‘‘(B) REGULATIONS.—The Secretary shall 
prescribe such regulations as may be necessary 
or appropriate to carry out this paragraph.’’. 
(b) QUALIFIED SUBSTITUTE.—Subsection (f) of section 
1445 (relating to definitions) is amended by adding at the 
end the following new paragraph: 
‘‘(6) QUALIFIED SUBSTITUTE.—The term ‘quali-
fied substitute’ means, with respect to a disposition of 
a United States real property interest— 
‘‘(A) the person (including any attorney or 
title company) responsible for closing the trans-
action, other than the transferor’s agent, and 
‘‘(B) the transferee’s agent.’’. 
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(c) EXEMPTION NOT TO APPLY IF KNOWLEDGE OR 
NOTICE THAT AFFIDAVIT OR STATEMENT IS FALSE.— 
(1) IN
GENERAL.—Paragraph (7) of section 
1445(b) (relating to special rules for paragraphs (2) 
and (3)) is amended to read as follows: 
‘‘(7) SPECIAL RULES FOR PARAGRAPHS (2), (3), 
AND (9).—Paragraph (2), (3), or (9) (as the case may 
be) shall not apply to any disposition— 
‘‘(A) if— 
‘‘(i) the transferee or qualified sub-
stitute has actual knowledge that the affi-
davit referred to in such paragraph, or the 
statement 
referred 
to 
in 
paragraph 
(9)(A)(ii), is false, or 
‘‘(ii) the transferee or qualified sub-
stitute receives a notice (as described in sub-
section (d)) from a transferor’s agent, trans-
feree’s agent, or qualified substitute that 
such affidavit or statement is false, or 
‘‘(B) if the Secretary by regulations requires 
the transferee or qualified substitute to furnish a 
copy of such affidavit or statement to the Sec-
retary and the transferee or qualified substitute 
fails to furnish a copy of such affidavit or state-
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such agent or qualified substitute shall so notify 
the transferee at such time and in such manner 
as the Secretary shall require by regulations.’’. 
(B) FAILURE TO FURNISH NOTICE.—Para-
graph (2) of section 1445(d) (relating to failure 
to furnish notice) is amended to read as follows: 
‘‘(2) FAILURE TO FURNISH NOTICE.— 
‘‘(A) IN
GENERAL.—If any transferor’s 
agent, transferee’s agent, or qualified substitute 
is required by paragraph (1) to furnish notice, 
but fails to furnish such notice at such time or 
times and in such manner as may be required 
by regulations, such agent or substitute shall 
have the same duty to deduct and withhold that 
the transferee would have had if such agent or 
substitute had complied with paragraph (1). 
‘‘(B) LIABILITY
LIMITED
TO
AMOUNT
OF 
COMPENSATION.—An agent’s or substitute’s li-
ability under subparagraph (A) shall be limited 
to the amount of compensation the agent or sub-
stitute derives from the transaction.’’. 
(C) CONFORMING AMENDMENT.—The head-
ing for section 1445(d) is amended by striking 
‘‘OR TRANSFEREE’S AGENTS’’ and inserting ‘‘, 
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TRANSFEREE’S AGENTS, OR QUALIFIED SUB-
STITUTES’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to dispositions of United States real 
property interests after the date of the enactment of this 
Act. 
SEC. 145. MODIFICATION OF DEFINITION OF TAX-EXEMPT 
USE PROPERTY FOR PURPOSES OF THE RE-
HABILITATION CREDIT. 
(a) 
IN
GENERAL.—Subclause 
(I) 
of 
section 
47(c)(2)(B)(v) is amended by striking ‘‘section 168(h)’’ and 
inserting ‘‘section 168(h), except that ‘50 percent’ shall be 
substituted for ‘35 percent’ in paragraph (1)(B)(iii) there-
of’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to expenditures properly taken into ac-
count for periods after December 31, 2007. 
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TITLE II—REFORMS RELATED TO 
REAL 
ESTATE 
INVESTMENT 
TRUSTS 
Subtitle A—Foreign Currency and 
Other Qualified Activities 
SEC. 201. REVISIONS TO REIT INCOME TESTS. 
(a) 
ADDITION
OF
PERMISSIBLE
INCOME
CAT-
EGORIES.—Section 856(c) (relating to limitations) is 
amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(2)(G) and by inserting after paragraph (2)(H) the 
following new subparagraphs: 
‘‘(I) passive foreign exchange gains; and 
‘‘(J) any other item of income or gain as 
determined by the Secretary;’’, and 
(2) by striking ‘‘and’’ at the end of paragraphs 
(3)(H) and (3)(I) and by inserting after paragraph 
(3)(I) the following new subparagraphs: 
‘‘(J) real estate foreign exchange gains; and 
‘‘(K) any other item of income or gain as 
determined by the Secretary; and’’. 
(b) RULES REGARDING FOREIGN CURRENCY TRANS-
ACTIONS.—Section 856 (defining real estate investment 
trust) is amended by adding at the end the following new 
subsection: 
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‘‘(n) RULES REGARDING FOREIGN CURRENCY TRANS-
ACTIONS.—With respect to any taxable year— 
‘‘(1) 
REAL
ESTATE
FOREIGN
EXCHANGE 
GAINS.—For purposes of subsection (c)(3)(J), the term 
‘real estate foreign exchange gains’ means— 
‘‘(A) foreign currency gains (as defined in 
section 988(b)(1)) which are attributable to— 
‘‘(i) any item described in subsection 
(c)(3) (other than in subparagraph (J) 
thereof), 
‘‘(ii) the acquisition or ownership of 
obligations secured by mortgages on real 
property or on interests in real property 
(other than foreign currency gains attrib-
utable to any item described in clause (i)), 
or 
‘‘(iii) becoming or being the obligor 
under obligations secured by mortgages on 
real property or on interests in real prop-
erty (other than foreign currency gains at-
tributable to any item described in clause 
(i)), 
‘‘(B) gains described in section 987 attrib-
utable to a qualified business unit (as defined by 
section 989) of the real estate investment trust, 
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but only if such qualified business unit meets the 
requirements under— 
‘‘(i) subsection (c)(3) (without regard 
to subparagraph (J) thereof) for the taxable 
year, and 
‘‘(ii) subsection (c)(4)(A) at the close of 
each quarter that the real estate investment 
trust has directly or indirectly held the 
qualified business unit, and 
‘‘(C) any other foreign currency gains as 
determined by the Secretary. 
‘‘(2) PASSIVE FOREIGN EXCHANGE GAINS.—For 
purposes of subsection (c)(2)(I), the term ‘passive for-
eign exchange gains’ means— 
‘‘(A) real estate foreign exchange gains, 
‘‘(B) foreign currency gains (as defined in 
section 988(b)(1)) which are not described in 
subparagraph (A) and which are attributable to 
any item described in subsection (c)(2) (other 
than in subparagraph (I) thereof), and 
‘‘(C) any other foreign currency gains as 
determined by the Secretary.’’. 
(c) ADDITION TO REIT HEDGING RULE.—Subpara-
graph (G) of section 856(c)(5) is amended to read as fol-
lows: 
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‘‘(G) TREATMENT OF CERTAIN HEDGING IN-
STRUMENTS.—Except to the extent as determined 
by the Secretary— 
‘‘(i) any income of a real estate invest-
ment trust from a hedging transaction (as 
defined in clause (ii) or (iii) of section 
1221(b)(2)(A)) which is clearly identified 
pursuant to section 1221(a)(7), including 
gain from the sale or disposition of such a 
transaction, shall not constitute gross in-
come under paragraphs (2) and (3) to the 
extent that the transaction hedges any in-
debtedness incurred or to be incurred by the 
trust to acquire or carry real estate assets, 
and 
‘‘(ii) any income of a real estate in-
vestment trust from a transaction entered 
into by the trust primarily to manage risk 
of currency fluctuations with respect to any 
item described in paragraph (2) or (3), in-
cluding gain from the termination of such 
a transaction, shall not constitute gross in-
come under paragraphs (2) and (3), but 
only if such transaction is clearly identified 
as such before the close of the day on which 
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it was acquired, originated, or entered into 
(or such other time as the Secretary may 
prescribe).’’. 
(d) AUTHORITY TO EXCLUDE ITEMS OF INCOME FROM 
REIT INCOME TESTS.—Section 856(c)(5) is amended by 
adding at the end the following new subparagraph: 
‘‘(H) SECRETARIAL
AUTHORITY
TO
EX-
CLUDE
OTHER
ITEMS
OF
INCOME.—The Sec-
retary is authorized to determine whether any 
item of income or gain which does not otherwise 
qualify under paragraph (2) or (3) may be con-
sidered as not constituting gross income solely 
for purposes of this part.’’. 
SEC. 202. REVISIONS TO REIT ASSET TESTS. 
(a) CLARIFICATION OF VALUATION TEST.—The first 
sentence 
in 
the 
matter 
following 
section 
856(c)(4)(B)(iii)(III) is amended by inserting ‘‘(including 
a discrepancy caused solely by the change in the foreign 
currency exchange rate used to value a foreign asset)’’ after 
‘‘such requirements’’. 
(b) CLARIFICATION
OF PERMISSIBLE ASSET CAT-
EGORY.—Section 856(c)(5), as amended by section 201(d), 
is amended by adding at the end the following new subpara-
graph: 
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‘‘(I) CASH.—The term ‘cash’ includes for-
eign currency if the real estate investment trust 
or its qualified business unit (as defined in sec-
tion 989) uses such foreign currency as its func-
tional currency (as defined in section 985(b)).’’. 
SEC. 203. CONFORMING FOREIGN CURRENCY REVISIONS. 
(a) NET INCOME FROM FORECLOSURE PROPERTY.— 
Clause (i) of section 857(b)(4)(B) is amended to read as 
follows: 
‘‘(i) gain (including any foreign cur-
rency gain, as defined in section 988(b)(1)) 
from the sale or other disposition of fore-
closure 
property 
described 
in 
section 
1221(a)(1) and the gross income for the tax-
able year derived from foreclosure property 
(as defined in section 856(e)), but only to 
the extent such gross income is not described 
in (or, in the case of foreign currency gain, 
not attributable to gross income described 
in) section 856(c)(3) other than subpara-
graph (F) thereof, over’’. 
(b) 
NET
INCOME
FROM
PROHIBITED
TRANS-
ACTIONS.—Clause (i) of section 857(b)(6)(B) is amended to 
read as follows: 
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‘‘(i) the term ‘net income derived from 
prohibited transactions’ means the excess of 
the gain (including any foreign currency 
gain, as defined in section 988(b)(1)) from 
prohibited transactions over the deductions 
(including any foreign currency loss, as de-
fined in section 988(b)(2)) allowed by this 
chapter which are directly connected with 
prohibited transactions;’’. 
Subtitle B—Taxable REIT 
Subsidiaries 
SEC. 211. CONFORMING TAXABLE REIT SUBSIDIARY ASSET 
TEST. 
Section 856(c)(4)(B)(ii) is amended by striking ‘‘20 
percent’’ and inserting ‘‘25 percent’’. 
Subtitle C—Dealer Sales 
SEC. 221. HOLDING PERIOD UNDER SAFE HARBOR. 
Section 857(b)(6) (relating to income from prohibited 
transactions) is amended— 
(1) by striking ‘‘4 years’’ in subparagraphs 
(C)(i), (C)(iv), and (D)(i) and inserting ‘‘2 years’’, 
(2) by striking ‘‘4-year period’’ in subpara-
graphs (C)(ii), (D)(ii), and (D)(iii) and inserting ‘‘2- 
year period’’, and 
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(3) by striking ‘‘real estate asset’’and all that fol-
lows through ‘‘if’’ in the matter preceding clause (i) 
of subparagraphs (C) and (D), respectively, and in-
serting ‘‘real estate asset (as defined in section 
856(c)(5)(B)) and which is described in section 
1221(a)(1) if’’. 
SEC. 222. DETERMINING VALUE OF SALES UNDER SAFE 
HARBOR. 
Section 857(b)(6) is amended— 
(1) by striking the semicolon at the end of sub-
paragraph (C)(iii) and inserting ‘‘, or (III) the fair 
market value of property (other than sales of fore-
closure property or sales to which section 1033 ap-
plies) sold during the taxable year does not exceed 10 
percent of the fair market value of all of the assets of 
the trust as of the beginning of the taxable year;’’, and 
(2) by adding ‘‘or’’ at the end of subclause (II) 
of subparagraph (D)(iv) and by adding at the end of 
such subparagraph the following new subclause: 
‘‘(III) the fair market value of prop-
erty (other than sales of foreclosure property 
or sales to which section 1033 applies) sold 
during the taxable year does not exceed 10 
percent of the fair market value of all of the 
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assets of the trust as of the beginning of the 
taxable year,’’. 
Subtitle D—Health Care REITs 
SEC. 231. CONFORMITY FOR HEALTH CARE FACILITIES. 
(a) RELATED PARTY RENTALS.—Subparagraph (B) of 
section 856(d)(8) (relating to special rule for taxable REIT 
subsidiaries) is amended to read as follows: 
‘‘(B) EXCEPTION FOR CERTAIN LODGING FA-
CILITIES
AND
HEALTH
CARE
PROPERTY.—The 
requirements of this subparagraph are met with 
respect to an interest in real property which is 
a qualified lodging facility or a qualified health 
care 
property 
(as 
defined 
in 
subsection 
(e)(6)(D)(i)) leased by the trust to a taxable 
REIT subsidiary of the trust if the property is 
operated on behalf of such subsidiary by a person 
who is an eligible independent contractor. For 
purposes of this section, a taxable REIT sub-
sidiary is not considered to be operating or man-
aging a qualified health care property or quali-
fied lodging facility solely because it directly or 
indirectly possesses a license, permit or similar 
instrument enabling it to do so.’’. 
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(b) ELIGIBLE INDEPENDENT CONTRACTOR.—Subpara-
graphs (A) and (B) of section 856(d)(9) (relating to eligible 
independent contractor) are amended to read as follows: 
‘‘(A) IN GENERAL.—The term ‘eligible inde-
pendent contractor’ means, with respect to any 
qualified lodging facility or qualified health care 
property (as defined in subsection (e)(6)(D)(i)), 
any independent contractor if, at the time such 
contractor enters into a management agreement 
or other similar service contract with the taxable 
REIT subsidiary to operate such qualified lodg-
ing facility or qualified health care property, 
such contractor (or any related person) is ac-
tively engaged in the trade or business of oper-
ating qualified lodging facilities or qualified 
health care properties, respectively, for any per-
son who is not a related person with respect to 
the real estate investment trust or the taxable 
REIT subsidiary. 
‘‘(B) SPECIAL RULES.—Solely for purposes 
of this paragraph and paragraph (8)(B), a per-
son shall not fail to be treated as an independent 
contractor with respect to any qualified lodging 
facility or qualified health care property (as so 
defined) by reason of the following: 
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‘‘(i) The taxable REIT subsidiary 
bears the expenses for the operation of such 
qualified lodging facility or qualified health 
care property pursuant to the management 
agreement or other similar service contract. 
‘‘(ii) The taxable REIT subsidiary re-
ceives the revenues from the operation of 
such qualified lodging facility or qualified 
health care property, net of expenses for 
such operation and fees payable to the oper-
ator pursuant to such agreement or con-
tract. 
‘‘(iii) The real estate investment trust 
receives income from such person with re-
spect to another property that is attrib-
utable to a lease of such other property to 
such person that was in effect as of the later 
of— 
‘‘(I) January 1, 1999, or 
‘‘(II) the earliest date that any 
taxable REIT subsidiary of such trust 
entered into a management agreement 
or other similar service contract with 
such person with respect to such quali-
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fied lodging facility or qualified health 
care property.’’. 
(c) TAXABLE REIT SUBSIDIARIES.—The last sentence 
of section 856(l)(3) is amended— 
(1) by inserting ‘‘or a health care facility’’ after 
‘‘a lodging facility’’, and 
(2) by inserting ‘‘or health care facility’’ after 
‘‘such lodging facility’’. 
Subtitle E—Effective Dates 
SEC. 241. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as otherwise provided in 
this section, the amendments made by this title shall apply 
to taxable years beginning after the date of the enactment 
of this Act. 
(b) REIT INCOME TESTS.— 
(1) The amendment made by section 201(a) and 
(b) shall apply to gains and items of income recog-
nized after the date of the enactment of this Act. 
(2) The amendment made by section 201(c) shall 
apply to transactions entered into after the date of the 
enactment of this Act. 
(3) The amendment made by section 201(d) shall 
apply after the date of the enactment of this Act. 
(c) CONFORMING FOREIGN CURRENCY REVISIONS.— 
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unless the customer notifies the broker 
that he elects another acceptable meth-
od under section 1012 with respect to 
the account in which such stock is held. 
‘‘(ii) EXCEPTION FOR WASH SALES.— 
Except as otherwise provided by the Sec-
retary, the customer’s adjusted basis shall be 
determined without regard to section 1091 
(relating to loss from wash sales of stock or 
securities) unless the transactions occur in 
the same account with respect to identical 
securities. 
‘‘(3) COVERED SECURITY.—For purposes of this 
subsection— 
‘‘(A) IN GENERAL.—The term ‘covered secu-
rity’ means any specified security acquired on or 
after the applicable date if such security— 
‘‘(i) was acquired through a trans-
action in the account in which such security 
is held, or 
‘‘(ii) was transferred to such account 
from an account in which such security was 
a covered security, but only if the broker re-
ceived a statement under section 6045A 
with respect to the transfer. 
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‘‘(B) 
SPECIFIED
SECURITY.—The 
term 
‘specified security’ means— 
‘‘(i) any share of stock in a corpora-
tion, 
‘‘(ii) any note, bond, debenture, or 
other evidence of indebtedness, 
‘‘(iii) any commodity, or contract or 
derivative with respect to such commodity, 
if the Secretary determines that adjusted 
basis reporting is appropriate for purposes 
of this subsection, and 
‘‘(iv) any other financial instrument 
with respect to which the Secretary deter-
mines that adjusted basis reporting is ap-
propriate for purposes of this subsection. 
‘‘(C) APPLICABLE DATE.—The term ‘appli-
cable date’ means— 
‘‘(i) January 1, 2010, in the case of 
any specified security which is stock in a 
corporation (other than any stock described 
in clause (ii)), 
‘‘(ii) January 1, 2011, in the case of 
any stock for which an average basis meth-
od is permissible under section 1012, and 
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‘‘(iii) January 1, 2012, or such later 
date determined by the Secretary in the case 
of any other specified security. 
‘‘(4) TREATMENT OF S CORPORATIONS.—In the 
case of the sale of a covered security acquired by an 
S corporation (other than a financial institution) 
after December 31, 2011, such S corporation shall be 
treated in the same manner as a partnership for pur-
poses of this section. 
‘‘(5) SPECIAL RULES FOR SHORT SALES.—In the 
case of a short sale, reporting under this section shall 
be made for the year in which such sale is closed.’’. 
(2) BROKER INFORMATION REQUIRED WITH RE-
SPECT TO OPTIONS.—Section 6045, as amended by 
subsection (a), is amended by adding at the end the 
following new subsection: 
‘‘(h) APPLICATION TO OPTIONS ON SECURITIES.— 
‘‘(1) EXERCISE
OF
OPTION.—For purposes of 
this section, if a covered security is acquired or dis-
posed of pursuant to the exercise of an option that 
was granted or acquired in the same account as the 
covered security, the amount received with respect to 
the grant or paid with respect to the acquisition of 
such option shall be treated as an adjustment to gross 
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proceeds or as an adjustment to basis, as the case 
may be. 
‘‘(2) LAPSE OR CLOSING TRANSACTION.—In the 
case of the lapse (or closing transaction (as defined in 
section 1234(b)(2)(A))) of an option on a specified se-
curity or the exercise of a cash-settled option on a 
specified security, reporting under subsections (a) and 
(g) with respect to such option shall be made for the 
calendar year which includes the date of such lapse, 
closing transaction, or exercise. 
‘‘(3) PROSPECTIVE
APPLICATION.—Paragraphs 
(1) and (2) shall not apply to any option which is 
granted or acquired before January 1, 2012. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the terms ‘covered security’ and ‘specified se-
curity’ shall have the meanings given such terms in 
subsection (g)(3).’’. 
(3) EXTENSION
OF
PERIOD
FOR
STATEMENTS 
SENT TO CUSTOMERS.— 
(A) IN GENERAL.—Subsection (b) of section 
6045 is amended by striking ‘‘January 31’’ and 
inserting ‘‘February 15’’. 
(B) STATEMENTS RELATED TO SUBSTITUTE 
PAYMENTS.—Subsection (d) of section 6045 is 
amended— 
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(i) by striking ‘‘at such time and’’, and 
(ii) by inserting after ‘‘other item.’’ the 
following new sentence: ‘‘The written state-
ment required under the preceding sentence 
shall be furnished on or before February 15 
of the year following the calendar year in 
which the payment was made.’’. 
(C) OTHER
STATEMENTS.—Subsection (b) 
of section 6045 is amended by adding at the end 
the following: ‘‘In the case of a consolidated re-
porting statement (as defined in regulations) 
with respect to any account, any statement 
which would otherwise be required to be fur-
nished on or before January 31 of a calendar 
year with respect to any item reportable to the 
taxpayer shall instead be required to be fur-
nished on or before February 15 of such calendar 
year if furnished with such consolidated report-
ing statement.’’. 
(b) DETERMINATION OF BASIS OF CERTAIN SECURI-
TIES ON ACCOUNT BY ACCOUNT OR AVERAGE BASIS METH-
OD.—Section 1012 (relating to basis of property–cost) is 
amended— 
(1) by striking ‘‘The basis of property’’ and in-
serting the following: 
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‘‘(a) IN GENERAL.—The basis of property’’, 
(2) by striking ‘‘The cost of real property’’ and 
inserting the following: 
‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ESTATE 
TAXES.—The cost of real property’’, and 
(3) by adding at the end the following new sub-
sections: 
‘‘(c) DETERMINATIONS BY ACCOUNT.— 
‘‘(1) IN GENERAL.—In the case of the sale, ex-
change, or other disposition of a specified security on 
or after the applicable date, the conventions pre-
scribed by regulations under this section shall be ap-
plied on an account by account basis. 
‘‘(2) APPLICATION TO OPEN-END FUNDS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any stock in an open-end 
fund acquired before January 1, 2011, shall be 
treated as a separate account from any such 
stock acquired on or after such date. 
‘‘(B) ELECTION
BY
OPEN-END
FUND
FOR 
TREATMENT AS SINGLE ACCOUNT.—If an open- 
end fund elects to have this subparagraph apply 
with respect to one or more of its stockholders— 
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‘‘(i) subparagraph (A) shall not apply 
with respect to any stock in such fund held 
by such stockholders, and 
‘‘(ii) all stock in such fund which is 
held by such stockholders shall be treated as 
covered 
securities 
described 
in 
section 
6045(g)(3) without regard to the date of the 
acquisition of such stock. 
A rule similar to the rule of the preceding sen-
tence shall apply with respect to a broker holding 
stock in an open-end fund as a nominee. 
‘‘(3) DEFINITIONS.—For purposes of this sec-
tion— 
‘‘(A) OPEN-END FUND.—The term ‘open-end 
fund’ means a regulated investment company (as 
defined in section 851) which is offering for sale 
or has outstanding any redeemable security of 
which it is the issuer. Any stock which is traded 
on an established securities exchange shall not be 
treated as stock in an open-end fund. 
‘‘(B) SPECIFIED
SECURITY; 
APPLICABLE 
DATE.—The terms ‘specified security’ and ‘appli-
cable date’ shall have the meaning given such 
terms in section 6045(g). 
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‘‘(d) AVERAGE BASIS FOR STOCK ACQUIRED PURSU-
ANT TO A DIVIDEND REINVESTMENT PLAN.— 
‘‘(1) IN GENERAL.—In the case of any stock ac-
quired after December 31, 2010, in connection with a 
dividend reinvestment plan, the basis of such stock 
while held as part of such plan shall be determined 
using one of the methods which may be used for deter-
mining the basis of stock in an open-end fund. 
‘‘(2) TREATMENT AFTER TRANSFER.—In the case 
of the transfer to another account of stock to which 
paragraph (1) applies, such stock shall have a cost 
basis in such other account equal to its basis in the 
dividend reinvestment plan immediately before such 
transfer (properly adjusted for any fees or other 
charges taken into account in connection with such 
transfer). 
‘‘(3) 
SEPARATE
ACCOUNTS; 
ELECTION
FOR 
TREATMENT AS SINGLE ACCOUNT.—Rules similar to 
the rules of subsection (c)(2) shall apply for purposes 
of this subsection. 
‘‘(4) DIVIDEND REINVESTMENT PLAN.—For pur-
poses of this subsection— 
‘‘(A) IN GENERAL.—The term ‘dividend re-
investment plan’ means any arrangement under 
which dividends on any stock are reinvested in 
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stock identical to the stock with respect to which 
the dividends are paid. 
‘‘(B) INITIAL STOCK ACQUISITION TREATED 
AS
ACQUIRED
IN
CONNECTION
WITH
PLAN.— 
Stock shall be treated as acquired in connection 
with a dividend reinvestment plan if such stock 
is acquired pursuant to such plan or if the divi-
dends paid on such stock are subject to such 
plan.’’. 
(c) INFORMATION
BY TRANSFERORS TO AID BRO-
KERS.— 
(1) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61 is amended by inserting after 
section 6045 the following new section: 
‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION 
WITH TRANSFERS OF COVERED SECURITIES 
TO BROKERS. 
‘‘(a) FURNISHING OF INFORMATION.—Every applica-
ble person which transfers to a broker (as defined in section 
6045(c)(1)) a security which is a covered security (as de-
fined in section 6045(g)(3)) in the hands of such applicable 
person shall furnish to such broker a written statement in 
such manner and setting forth such information as the Sec-
retary may by regulations prescribe for purposes of ena-
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bling such broker to meet the requirements of section 
6045(g). 
‘‘(b) APPLICABLE PERSON.—For purposes of sub-
section (a), the term ‘applicable person’ means— 
‘‘(1) 
any 
broker 
(as 
defined 
in 
section 
6045(c)(1)), and 
‘‘(2) any other person as provided by the Sec-
retary in regulations. 
‘‘(c) TIME FOR FURNISHING STATEMENT.—Except as 
otherwise provided by the Secretary, any statement required 
by subsection (a) shall be furnished not later than 15 days 
after the date of the transfer described in such subsection.’’. 
(2) ASSESSABLE PENALTIES.—Paragraph (2) of 
section 6724(d) (defining payee statement) is amend-
ed by redesignating subparagraphs (I) through (CC) 
as subparagraphs (J) through (DD), respectively, and 
by inserting after subparagraph (H) the following 
new subparagraph: 
‘‘(I) section 6045A (relating to information 
required in connection with transfers of covered 
securities to brokers),’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter A of 
chapter 61 is amended by inserting after the item re-
lating to section 6045 the following new item: 
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‘‘Sec. 6045A. Information required in connection with transfers of covered securi-
ties to brokers.’’. 
(d) ADDITIONAL ISSUER INFORMATION TO AID BRO-
KERS.— 
(1) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61, as amended by subsection 
(b), is amended by inserting after section 6045A the 
following new section: 
‘‘SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING 
BASIS OF SPECIFIED SECURITIES. 
‘‘(a) IN GENERAL.—According to the forms or regula-
tions prescribed by the Secretary, any issuer of a specified 
security shall make a return setting forth— 
‘‘(1) a description of any organizational action 
which affects the basis of such specified security of 
such issuer, 
‘‘(2) the quantitative effect on the basis of such 
specified security resulting from such action, and 
‘‘(3) such other information as the Secretary 
may prescribe. 
‘‘(b) TIME FOR FILING RETURN.—Any return required 
by subsection (a) shall be filed not later than the earlier 
of— 
‘‘(1) 45 days after the date of the action de-
scribed in subsection (a), or 
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