I 
111TH CONGRESS 
1ST SESSION H. R. 3207 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
gain on the sale of certain residential leased-fee interests to holders 
of the leasehold rights. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 14, 2009 
Mr. ABERCROMBIE (for himself and Ms. HIRONO) 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 exclude 
from gross income gain on the sale of certain residential 
leased-fee interests to holders of the leasehold rights. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXCLUSION OF GAIN FROM SALES OF CERTAIN 
RESIDENTIAL LEASED-FEE INTERESTS TO 
HOLDERS OF THE LEASEHOLD RIGHTS. 
(a) GENERAL RULE.—Part III of subchapter B of 
chapter 1 of the Internal Revenue Code of 1986 (relating 
to items specifically excluded from gross income) is 
VerDate Nov 24 2008 
03:50 Jul 15, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3207.IH
H3207
smartinez on DSKB9S0YB1PROD with BILLS
amended by inserting after section 139C the following new 
section: 
‘‘SEC. 139D. SALES OF CERTAIN RESIDENTIAL LEASED-FEE 
INTERESTS TO HOLDERS OF THE LEASEHOLD 
RIGHTS. 
‘‘(a) GENERAL RULE.—In the case of a fee simple 
owner-lessor, and legal and equitable owners, of qualified 
property, gross income does not include gain from the sale 
of such property to a holder of the leasehold right if such 
holder is— 
‘‘(1) an association of apartment owners of a 
multi-family residential leasehold property, or 
‘‘(2) a cooperative housing corporation for a 
residential leasehold property. 
‘‘(b) QUALIFIED PROPERTY.—For purposes of sub-
section (a), the term ‘qualified property’ means the leased- 
fee interest to any residential house lot or the leased-fee 
interest in a condominium or co-operative housing apart-
ment in a multi-family residential leasehold property. 
‘‘(c) OTHER DEFINITIONS.—For purposes of this 
section (b)— 
‘‘(1) FEE SIMPLE OWNER, LEASED-FEE INTER-
EST, LEGAL AND EQUITABLE OWNERS.—The terms 
‘fee simple owner’, ‘leased-fee interest’, and ‘legal 
and equitable owners’ shall have the same meaning 
VerDate Nov 24 2008 
03:50 Jul 15, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3207.IH
H3207
smartinez on DSKB9S0YB1PROD with BILLS
as defined in Hawaii Revised Statutes section 516– 
1. 
‘‘(2) MULTI-FAMILY RESIDENTIAL LEASEHOLD 
PROPERTY, 
MULTI-FAMILY
RESIDENTIAL
LEASE-
HOLD
UNIT.—The terms ‘multi-family residential 
leasehold property’ and ‘multi-family residential 
leasehold unit’ mean property or units within a 
planned unit development, condominium project, or 
cooperative housing project, as those terms are de-
fined in Hawaii Revised Statutes section 514C–1. 
‘‘(d) TERMINATION.—This section shall not apply to 
any taxable year beginning after December 31, 2014.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for such part is amended by inserting after the item relat-
ing to section 139C the following new item: 
‘‘Sec. 139D. Sales of certain residential leased-fee interests to holders of the 
leasehold rights.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after December 31, 2009. 
Æ 
VerDate Nov 24 2008 
21:20 Jul 15, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6301
E:\BILLS\H3207.IH
H3207
smartinez on DSKB9S0YB1PROD with BILLS