I
107TH CONGRESS
1ST SESSION
H. R. 1596
To amend the Internal Revenue Code of 1986 to provide a special rule
for members of the uniformed services and the Foreign Service, and
other employees, in determining the exclusion of gain from the sale
of a principal residence.
IN THE HOUSE OF REPRESENTATIVES
APRIL 26, 2001
Mr. HOUGHTON (for himself, Mr. FOLEY, Mr. SAM JOHNSON of Texas, Mr.
SCHAFFER, Mr. RANGEL, Mr. WATKINS, Mr. JONES of North Carolina,
Mrs. THURMAN, and Mr. LEWIS of Kentucky) 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 provide
a special rule for members of the uniformed services
and the Foreign Service, and other employees, in deter-
mining the exclusion of gain from the sale of a principal
residence.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SPECIAL RULE FOR MEMBERS OF UNIFORMED
SERVICES 
AND 
FOREIGN 
SERVICE, 
AND
OTHER EMPLOYEES, IN DETERMINING EX-
CLUSION OF GAIN FROM SALE OF PRINCIPAL
RESIDENCE.
(a) IN GENERAL.—Subsection (d) of section 121 of
the Internal Revenue Code of 1986 (relating to exclusion
of gain from sale of principal residence) is amended by
adding at the end the following new paragraphs:
‘‘(9) MEMBERS OF UNIFORMED SERVICES AND
FOREIGN SERVICE.—
‘‘(A) IN GENERAL.—The running of the 5-
year period described in subsection (a) shall be
suspended with respect to an individual during
any time that such individual or such individ-
ual’s spouse is serving on qualified official ex-
tended duty as a member of the uniformed
services or of the Foreign Service.
‘‘(B) QUALIFIED
OFFICIAL
EXTENDED
DUTY.—For purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘quali-
fied official extended duty’ means any pe-
riod of extended duty as a member of the
uniformed services or a member of the
Foreign Service during which the member
serves at a duty station which is at least
50 miles from such property or is under
Government orders to reside in Govern-
ment quarters.
‘‘(ii) 
UNIFORMED
SERVICES.—The
term ‘uniformed services’ has the meaning
given such term by section 101(a)(5) of
title 10, United States Code, as in effect
on the date of the enactment of this para-
graph.
‘‘(iii) FOREIGN
SERVICE
OF
THE
UNITED
STATES.—The term ‘member of
the Foreign Service’ has the meaning given
the term ‘member of the Service’ by para-
graph (1), (2), (3), (4), or (5) of section
103 of the Foreign Service Act of 1980, as
in effect on the date of the enactment of
this paragraph.
‘‘(iv) EXTENDED
DUTY.—The term
‘extended duty’ means any period of active
duty pursuant to a call or order to such
duty for a period in excess of 90 days or
for an indefinite period.
‘‘(10) OTHER EMPLOYEES.—
‘‘(A) IN GENERAL.—The running of the 5-
year period described in subsection (a) shall be
suspended with respect to an individual during
any time that such individual or such individ-
ual’s spouse is serving as an employee for a pe-
riod in excess of 90 days in an assignment by
such employee’s employer outside the United
States.
‘‘(B) LIMITATIONS AND SPECIAL RULES.—
‘‘(i) MAXIMUM
PERIOD
OF
SUSPEN-
SION.—The suspension under subpara-
graph (A) with respect to a principal resi-
dence shall not exceed (in the aggregate) 5
years.
‘‘(ii) MEMBERS OF UNIFORMED SERV-
ICES
AND
FOREIGN
SERVICE.—Subpara-
graph (A) shall not apply to an individual
to whom paragraph (9) applies.
‘‘(iii) SELF-EMPLOYED
INDIVIDUAL
NOT
CONSIDERED
AN
EMPLOYEE.—For
purposes of this paragraph, the term ‘em-
ployee’ does not include an individual who
is an employee within the meaning of sec-
tion 401(c)(1) (relating to self-employed
individuals).’’.