I
103D CONGRESS
1ST SESSION
H. R. 776
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for the purchase of a principal residence by a first-time
homebuyer.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 3, 1993
Mrs. JOHNSON of Connecticut (for herself, Mrs. ROUKEMA, Mr. RAVENEL,
Mr. BURTON of Indiana, Mr. LEWIS of Florida, Mr. KING, Mr.
GALLEGLY, Mr. DOOLITTLE, Mr. ROHRABACHER, Mr. GILMAN, Mr. SAM
JOHNSON of Texas, Mr. FRANKS of Connecticut, Mr. GREENWOOD, and
Mr. SHAYS), introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
credit against income tax for the purchase of a principal
residence by a first-time homebuyer.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR FIRST-TIME HOMEBUYERS.
(a) IN GENERAL.—Subpart A of part IV of chapter
1 of the Internal Revenue Code of 1986 is amended by
inserting after section 22 the following new section:
‘‘SEC. 23. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST-
TIME HOMEBUYER.
‘‘(a) ALLOWANCE OF CREDIT.—If an individual who
is a first-time homebuyer purchases a principal residence
(within the meaning of section 1034), there shall be al-
lowed to such individual as a credit against the tax im-
posed by this subtitle an amount equal to 10 percent of
the purchase price of the principal residence.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM
CREDIT.—The credit allowed
under subsection (a) shall not exceed $2,500.
‘‘(2) LIMITATION
TO
ONE
RESIDENCE.—The
credit under this section shall be allowed with re-
spect to only one residence of the taxpayer.
‘‘(3) MARRIED INDIVIDUALS FILING JOINTLY.—
In the case of a husband and wife who file a joint
return under section 6013, the credit under this sec-
tion is allowable only if both the husband and wife
are first-time homebuyers, and the amount specified
under paragraph (1) shall apply to the joint return.
‘‘(4) OTHER TAXPAYERS.—In the case of indi-
viduals to whom paragraph (3) does not apply who
together purchase the same new principal residence
for use as their principal residence, the credit under
this section is allowable only if each of the individ-
uals is a first-time homebuyer, and the sum of the
amount of credit allowed to such individuals shall
not exceed the lesser of $2,500 or 10 percent of the
total purchase price of the residence. The amount of
any credit allowable under this section shall be ap-
portioned among such individuals under regulations
to be prescribed by the Secretary.
‘‘(5) APPLICATION WITH OTHER CREDITS.—
‘‘(A) GENERAL RULE.—The credit allowed
by subsection (a) for any taxable year shall not
exceed the amount of the tax imposed by this
chapter for the taxable year, reduced by the
sum of any other credits allowable under this
chapter.
‘‘(B) CARRYFORWARD OF UNUSED CRED-
ITS.—Any credit that is not allowed for the tax-
able year solely by reason of subparagraph (A)
shall be carried forward to the succeeding tax-
able year and allowed as a credit for that tax-
able year. However, the credit shall not be car-
ried forward more than 5 taxable years after
the taxable year in which the residence is pur-
chased.
‘‘(6) YEAR
FOR
WHICH
CREDIT
ALLOWED.—
Fifty percent of the credit allowed by subsection (a)
shall be allowed in the taxable year in which the res-
idence is purchased and the remaining fifty percent
of the credit shall be allowed in the succeeding tax-
able year.
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) PURCHASE
PRICE.—The term ‘purchase
price’ means the adjusted basis of the principal resi-
dence on the date of the acquisition thereof.
‘‘(2) FIRST-TIME HOMEBUYER.—
‘‘(A) IN GENERAL.—The term ‘first-time
homebuyer’ means any individual if such indi-
vidual has not had a present ownership interest
in any residence (including an interest in a
housing cooperative) at any time within the 36-
month period ending on the date of acquisition
of the residence on which the credit allowed
under subsection (a) is to be claimed. An inter-
est in a partnership, S corporation, or trust
that owns an interest in a residence is not con-
sidered an interest in a residence for purposes
of this paragraph except as may be provided in
regulations.
‘‘(B) 
CERTAIN
INDIVIDUALS.—Notwith-
standing subparagraph (A), an individual is not
a first-time homebuyer on the date of purchase
36 months after the date the taxpayer acquired the
property as his principal residence, then the tax im-
posed under this chapter for the taxable year in
which the disposition occurs is increased by an
amount equal to the amount allowed as a credit for
the purchase of such property.
‘‘(2) ACQUISITION OF NEW RESIDENCE.—If, in
connection with a disposition described in paragraph
(1) and within the applicable period prescribed in
section 1034, the taxpayer purchases a new principal
residence, then the provisions of paragraph (1) shall
not apply and the tax imposed by this chapter for
the taxable year in which the new principal residence
is purchased is increased to the extent the amount
of the credit that could be claimed under this section
on the purchase of the new residence (determined
without regard to subsection (e)) is less than the
amount of credit claimed by the taxpayer under this
section.
‘‘(3) DEATH OF OWNER; CASUALTY LOSS; IN-
VOLUNTARY CONVERSION; ETC.—The provisions of
paragraph (1) do not apply to—
‘‘(A) a disposition of a residence made on
account of the death of any individual having a
legal or equitable interest therein occurring dur-
ing the 36-month period to which reference is
made under paragraph (1),
‘‘(B) a disposition of the old residence if it
is substantially or completely destroyed by a
casualty described in section 165(c)(3) or
compulsorily or involuntarily converted (within
the meaning of section 1033(a)), or
‘‘(C) a disposition pursuant to a settlement
in a divorce or legal separation proceeding
where the residence is sold or the other spouse
retains the residence as a principal residence.
‘‘(e) PROPERTY TO WHICH SECTION APPLIES.—
‘‘(1) IN GENERAL.—The provisions of this sec-
tion apply to a principal residence if—
‘‘(A) the taxpayer acquires the residence
during 1993, or
‘‘(B) the taxpayer enters into a binding
contract during 1993 to acquire the residence,
and acquires and occupies the residence before
July 1, 1994.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of chapter 1 of such Code is
amended by inserting after section 22 the following new
item:
‘‘Sec. 23. Purchase of principal residence by first-time home-
buyer.’’
(c) EFFECTIVE DATE.—The amendments made by
this section are effective on January 1, 1993.
Æ