SECTION 1. DEDUCTION FOR INDIVIDUALS WHO HAVE ATTAINED AGE 55 FOR REAL 
              PROPERTY TAX INSURANCE WITH RESPECT TO PRINCIPAL 
              RESIDENCE.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 220 as 
section 221 and by inserting after section 219 the following new 
section:

``SEC. 220. DEDUCTION FOR INDIVIDUALS WHO HAVE ATTAINED AGE 55 FOR REAL 
              PROPERTY TAX INSURANCE WITH RESPECT TO PRINCIPAL 
              RESIDENCE.

    ``(a) In General.--In the case of an individual who has attained 
age 55 before the close of the taxable year, there shall be allowed as 
a deduction an amount equal to the premiums paid or incurred during the 
taxable year for any qualified real property tax insurance contract 
with respect to the principal residence of such individual.
    ``(b) Qualified Real Property Tax Insurance Contract.--For purposes 
of this section--
            ``(1) In general.--The term `qualified real property tax 
        insurance contract' means any insurance contract--
                    ``(A) which permits premiums to be paid for such 
                insurance only after the policyholder attains age 55 
                and before the policyholder attains age 65,
                    ``(B) which pays, at the election of the 
                policyholder--
                            ``(i) the excess of--
                                    ``(I) the amount of the State and 
                                local real property taxes imposed on 
                                the principal residence of the 
                                policyholder for each real property tax 
                                year in the insured period, over
                                    ``(II) the amount of such taxes 
                                imposed on such residence for the last 
                                real property tax year beginning before 
                                the insured period (or, if later, the 
                                first real property tax year for which 
                                the policyholder was liable for such 
                                taxes imposed on such residence), or
                            ``(ii) the amount of the State and local 
                        real property taxes imposed on the principal 
                        residence of the policyholder for each real 
                        property tax year in the insured period,
                    ``(C) which provides for a refund of the cash value 
                of the insurance contract (if any) if--
                            ``(i) the residence is sold or exchanged 
                        before the end of the insured period, or
                            ``(ii) the insured period ends by reason of 
                        the last sentence of paragraph (2), and
                    ``(D) in the case of a husband and wife who are 
                joint policyholders, which provides for a waiver of 
                premiums for such insurance after the death of either 
                spouse.
            ``(2) Insured period.--The term `insured period' means--
                    ``(A) in the case of an election to have paragraph 
                (1)(B)(i) apply, the 10 real property tax years 
                beginning after the date the policyholder attains age 
                65, and
                    ``(B) in the case of an election to have paragraph 
                (1)(B)(ii) apply, the number of real property tax years 
                (beginning after the date the policyholder attains age 
                65) selected by the policyholder but only if the number 
                selected is 5, 10, 15, or 20.
        In no event shall the insured period end after the close of the 
        real property tax year in which the last policyholder dies.
            ``(3) Principal residence.--The term `principal residence' 
        has the meaning given to such term by section 1034.
            ``(4) State and local real property taxes.--The term `State 
        and local real property taxes' means any real property tax 
        which is a State or local tax (within the meaning of section 
        164(b)(2)); except that such term shall not include any amount 
        for which a deduction is not allowable by reason of section 
        164(c)(1).
    ``(c) Premium Requirements.--
            ``(1) In general.--Except as provided in paragraph (2), an 
        insurance contract shall be treated as a qualified real 
        property tax insurance contract only if the annual premium for 
        any year does not exceed the amount equal to 150 percent of the 
        amount of the State and local real property taxes imposed on 
        the principal residence of the policyholder for the real 
        property tax year ending during the preceding year.
            ``(2) Single premiums permitted in certain cases.--
        Paragraph (1) shall not apply to any premium paid during any 
        calendar year if--
                    ``(A) not less than the amount of such premium is 
                paid or distributed during such year to the taxpayer 
                from any individual retirement plan of the taxpayer, or
                    ``(B) the taxpayer receives during such year a lump 
                sum distribution (as defined in section 402(d)(4)) in 
                an amount not less than the amount of such premium.
        This paragraph shall not apply if the amount of any premium 
        paid, when added to premiums previously paid, exceeds the 
        amount reasonably necessary (as determined under regulations 
        prescribed by the Secretary) to fund the payments referred to 
        in subsection (b)(1)(B).
    ``(d) Special Rules for Married Individuals.--For purposes of this 
section--
            ``(1) In general.--In the case of a husband and wife who 
        are joint policyholders, this section shall be applied by 
        taking into account only the age of the older spouse.
            ``(2) Property of deceased spouse.--If--
                    ``(A) an individual's spouse died during the period 
                applicable under subsection (b)(1)(A),
                    ``(B) such spouse was the older spouse, and
                    ``(C) any premium for any qualified real property 
                tax insurance contract was paid by either spouse before 
                the date of such death,
        the age the older spouse would have been shall continue to be 
        the only age taken into account for purposes of this section.
    ``(e) Other Special Rules.--
            ``(1) Tax treatment of refund of cash value.--Any refund of 
        the cash value of any qualified real property tax insurance 
        contract shall be includible in gross income for the taxable 
        year in which received.
            ``(2) Denial of deduction for payment of taxes.--No 
        deduction shall be allowed under this chapter for any payment 
        of tax under any qualified real property tax insurance 
        contract.
            ``(3) Tenant-stockholder in cooperative housing 
        corporation.--A rule similar to the rule of section 1034(f) 
        shall apply for purposes of this section.''
    (b) Deduction Allowed Whether or Not Taxpayer Itemizes Other 
Deductions.--Subsection (a) of section 62 of such Code is amended by 
inserting after paragraph (15) the following new paragraph:
            ``(16) Qualified real property tax insurance premiums.--The 
        deduction allowed by section 220.''
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following new items:

                              ``Sec. 220. Deduction for individuals who 
                                        have attained age 55 for real 
                                        property tax insurance with 
                                        respect to principal residence.
                              ``Sec. 221. Cross reference.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
Output: Amends the Internal Revenue Code to allow, for taxpayers at least 55 years old, a deduction for the premiums for principal residence real property tax insurance.  Allows the deduction whether or not the taxpayer itemizes other deductions.