SEC. 
2. 
CREDIT 
FOR 
REPLACEMENT 
WOOD-BURNING 
STOVES MEETING ENVIRONMENTAL STAND-
ARDS. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to nonrefundable personal credits) is 
amended by inserting after section 25D the following new 
section: 
‘‘SEC. 25E. REPLACEMENT OF WOOD-BURNING STOVES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the qualified stove replacement expenditures paid 
or incurred by taxpayer during the taxable year. 
‘‘(b) LIMITATION.—The amount of the credit under 
subsection (a) with respect to the replacement of each non-
compliant wood stove shall not exceed $500. 
‘‘(c) QUALIFIED STOVE REPLACEMENT EXPENDI-
TURES.— 
‘‘(1) IN GENERAL.—The term ‘qualified stove 
replacement expenditures’ means an expenditure for 
the purchase and installation of a compliant stove 
which— 
‘‘(A) is installed in a dwelling unit located 
in the United States, and 
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‘‘(B) replaces a noncompliant wood stove 
used in such dwelling unit. 
Such term includes expenditures for labor costs 
properly allocable to the onsite preparation, assem-
bly, or original installation of the compliant stove. 
‘‘(2) COMPLIANT STOVE.—The term ‘compliant 
stove’ means— 
‘‘(A) a wood-burning stove which meets the 
requirements set forth in the Standards of Per-
formance for New Residential Wood Heaters 
issued by the Environmental Protection Agency, 
and 
‘‘(B) a pellet or corn burning stove. 
‘‘(3) NONCOMPLIANT WOOD STOVE.—The term 
‘noncompliant wood stove’ means any wood-burning 
stove that is not a compliant stove. 
‘‘(d) JOINT OCCUPANCY, COOPERATIVE HOUSING 
CORPORATIONS, AND WHEN EXPENDITURE MADE.— 
Rules similar to the rules of paragraphs (4), (5), and (8) 
of section 25D(e) shall apply for purposes of this section. 
‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to any property, the increase in the 
basis of such property which would (but for this sub-
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section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(f) TERMINATION.—This section shall not apply to 
expenditures made after December 31, 2010.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 1016 of such Code 
is amended by striking ‘‘and’’ at the end of para-
graph (36), by striking the period at the end of 
paragraph (37) and inserting ‘‘, and’’, and by add-
ing at the end the following new paragraph: 
‘‘(38) the case of property with respect to which 
a credit has been allowed under 25E, to the extent 
provided in section 25E(e).’’. 
(2) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the items relating to sec-
tion 25D the following new item: 
‘‘Sec. 25E. Replacement of wood-burning stoves.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures for stoves pur-
chased after the date of enactment of this Act. 
Æ 
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