H.R.2475 - A bill to amend the Internal Revenue Code of 1954 to simplify the imputed interest rules of sections 1274 and 483, and for other purposes.99th Congress (1985-1986)
|Sponsor:||Rep. Rostenkowski, Dan [D-IL-8] (Introduced 05/14/1985)|
|Committees:||House - Ways and Means | Senate - Finance|
|Committee Reports:||S.Rept 99-83; H.Rept 99-87; H.Rept 99-250|
|Latest Action:||10/11/1985 Became Public Law No: 99-121. (All Actions)|
|Roll Call Votes:||There have been 5 roll call votes|
This bill has the status Became Law
Here are the steps for Status of Legislation:
- Passed House
- Passed Senate
- Resolving Differences
- To President
- Became Law
Summary: H.R.2475 — 99th Congress (1985-1986)All Information (Except Text)
(Conference report filed in House, H. Rept. 99-250)
Conference report filed in House (08/01/1985)
Title I: Amendments to Imputed Interest Rules - Amends the Internal Revenue Code to reduce the imputation rate on seller-financed transactions from 120 percent to 100 percent of the Federal rate. Eliminates the separate testing rate for the determination of imputed interest. Directs the Secretary of the Treasury to make a determination of the Federal short-term, mid-term, and long-term rates on a monthly basis. Permits the use of a lower rate than the applicable Federal rate where such rate is based on the same principles as the applicable Federal rate and is appropriate for the terms of the instrument. Provides that the rate applicable to the sale or exchange shall be the lowest three-month rate.
Requires that an imputed interest rate of 110 of the applicable Federal rate (AFR) applies to sale-leaseback transactions.
Provides that the rate used to test the adequacy of stated interest on the first $2,800,000 of seller financing shall not exceed nine percent. Provides for an inflation adjustment for the $2,800,000 amount for purposes of the nine percent rate beginning after 1989.
Allows the parties to elect to account for interest using the cash method of accounting where the transaction amount of seller-financing is not more than $2,000,000.
Lengthens to 19 years the recovery period for which real property may be depreciated on an accelerated basis.
Exempts the imputed interest rules from certain workout arrangements in connection with loans involving the New York State Mortgage Loan Enforcement and Administration Corporation.
Title II: Amendments to Below-Market Interest Rules - Exempts from the below-market interest rate rules for any calendar year, below-market loans made by a lender to a qualified continuing care facility pursuant to a continuing care contract if the lender has attained age 65 before the close of such year. Provides that the loan amount shall not exceed $90,000, including the aggregate amount of all other previous loans between the lender and such a facility. Sets forth other requirements for loans to continuing care facilities.
Requires that a facility shall not be treated as a qualified continuing care facility unless substantially all facilities which are used to provide services under a continuing care contract are owned and operated by the borrower.
Provides that nursing homes are excluded from the definition of a qualified continuing care facility.
Provides for an inflation adjustment to the limit on the amount of the loans to qualified continuing care facilities for loans made during any calendar year after 1986.
Provides that the rate used for determining whether an employee relocation loan is a below-market loan to which additional interest will be imputed will be the AFR for the month in which the employee enters into a written contract for the purchase of a principal residence.
Provides that the imputed interest rules of the Code will not apply to payments made to an independent living facility for the elderly by a payor who is at least 65 years old if certain criteria are met.