Text: H.R.1690 — 106th Congress (1999-2000)All Information (Except Text)

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Introduced in House (05/05/1999)

 
[Congressional Bills 106th Congress]
[From the U.S. Government Printing Office]
[H.R. 1690 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1690

To amend the Internal Revenue Code of 1986 to exclude from gross income 
  of individual taxpayers discharges of indebtedness attributable to 
           certain forgiven residential mortgage obligations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 5, 1999

Mr. Andrews (for himself and Mr. Foley) 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 
  of individual taxpayers discharges of indebtedness attributable to 
           certain forgiven residential mortgage obligations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mortgage Cancellation Relief Act of 
1999''.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR CERTAIN FORGIVEN MORTGAGE 
              OBLIGATIONS.

    (a) In General.--Paragraph (1) of section 108(a) of the Internal 
Revenue Code of 1986 (relating to exclusion from gross income) is 
amended by striking ``or'' at the end of both subparagraphs (A) and 
(C), by striking the period at the end of subparagraph (D) and 
inserting ``, or'', and by inserting after subparagraph (D) the 
following new subparagraph:
                    ``(E) in the case of an individual, the 
                indebtedness discharged is qualified residential 
                indebtedness.''.
    (b) Qualified Residential Indebtedness Shortfall.--Section 108 of 
such Code (relating to discharge of indebtedness) is amended by adding 
at the end the following new subsection:
    ``(h) Qualified Residential Indebtedness.--
            ``(1) Limitations.--The amount excluded under subparagraph 
        (E) of subsection (a)(1) with respect to any qualified 
        residential indebtedness shall not exceed the excess (if any) 
        of--
                    ``(A) the outstanding principal amount of such 
                indebtedness (immediately before the discharge), over
                    ``(B) the sum of--
                            ``(i) the amount realized from the sale of 
                        the real property securing such indebtedness 
                        reduced by the cost of such sale, and
                            ``(ii) the outstanding principal amount of 
                        any other indebtedness secured by such 
                        property.
            ``(2) Qualified residential indebtedness.--
                    ``(A) In general.--The term `qualified residential 
                indebtedness' means indebtedness which--
                            ``(i) was incurred or assumed by the 
                        taxpayer in connection with real property used 
                        as a residence and is secured by such real 
                        property,
                            ``(ii) is incurred or assumed to acquire, 
                        construct, reconstruct, or substantially 
                        improve such real property, and
                            ``(iii) with respect to which such taxpayer 
                        makes an election to have this paragraph apply.
                    ``(B) Refinanced indebtedness.--Such term shall 
                include indebtedness resulting from the refinancing of 
                indebtedness under subparagraph (A)(ii), but only to 
                the extent the refinanced indebtedness does not exceed 
                the amount of the indebtedness being refinanced.
                    ``(C) Exceptions.--Such term shall not include 
                qualified farm indebtedness or qualified real property 
                business indebtedness.''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 108(a) of such Code is 
        amended--
                    (A) in subparagraph (A) by striking ``and (D)'' and 
                inserting ``(D), and (E)'', and
                    (B) by amending subparagraph (B) to read as 
                follows:
                    ``(B) Insolvency exclusion takes precedence over 
                qualified farm exclusion; qualified real property 
                business exclusion; and qualified residential shortfall 
                exclusion.--Subparagraphs (C), (D), and (E) of 
                paragraph (1) shall not apply to a discharge to the 
                extent the taxpayer is insolvent.''.
            (2) Paragraph (1) of section 108(b) of such Code is amended 
        by striking ``or (C)'' and inserting ``(C), or (E)''.
            (3) Subsection (c) of section 121 of such Code is amended 
        by adding at the end the following new paragraph:
            ``(4) Special rule relating to discharge of indebtedness.--
        The amount of gain which (but for this paragraph) would be 
        excluded from gross income under subsection (a) with respect to 
        a principal residence shall be reduced by the amount excluded 
        from gross income under section 108(a)(1)(E) with respect to 
        such residence.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges after the date of the enactment of this Act.
                                 <all>

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