Taxi Medallion Loan Forgiveness Debt Relief Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 5617 To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on taxi medallions from gross income. IN THE HOUSE OF REPRESENTATIVES JANUARY 15, 2020 Mr. MEEKS (for himself, Ms. VELA´ZQUEZ, Mr. ROSE of New York, Mrs. CAROLYN B. MALONEY of New York, Ms. MENG, Mr. SUOZZI, Mr. ENGEL, Ms. CLARKE of New York, Mr. ESPAILLAT, Mr. NADLER, Mr. SERRANO, Mr. JEFFRIES, Mr. KING of New York, Ms. OCASIO-CORTEZ, and Miss RICE of New York) introduced the following bill; which was re- ferred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on taxi medallions from gross income. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Taxi Medallion Loan 4 Forgiveness Debt Relief Act of 2020’’. 5 VerDate Sep 11 2014 04:40 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5617.IH H5617 2 •HR 5617 IH SEC. 2. EXCLUSION OF DISCHARGES OF QUALIFIED TAXI 1 MEDALLION INDEBTEDNESS. 2 (a) IN GENERAL.—Section 108(a)(1) of the Internal 3 Revenue Code of 1986 is amended by striking ‘‘or’’ at the 4 end of subparagraph (D), by striking the period at the 5 end of subparagraph (E) and inserting ‘‘, or’’, and by in- 6 serting after subparagraph (E) the following new subpara- 7 graph: 8 ‘‘(F) in the case of a taxpayer other than 9 a C corporation, the indebtedness discharged is 10 qualified taxi medallion indebtedness which is 11 discharged before January 1, 2023.’’. 12 (b) SPECIAL RULES RELATING TO QUALIFIED TAXI 13 MEDALLION INDEBTEDNESS.—Section 108 of such Code 14 is amended by adding at the end the following new sub- 15 section: 16 ‘‘(j) SPECIAL RULES RELATING TO QUALIFIED TAXI 17 MEDALLION INDEBTEDNESS.— 18 ‘‘(1) BASIS REDUCTION.—The amount excluded 19 from gross income by reason of subsection (a)(1)(E) 20 shall be applied to reduce (but not below zero) the 21 basis of the taxi medallions of the taxpayer that se- 22 cure the discharged indebtedness. 23 ‘‘(2) QUALIFIED TAXI MEDALLION INDEBTED- 24 NESS.—For purposes of this section— 25 VerDate Sep 11 2014 04:40 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5617.IH H5617 3 •HR 5617 IH ‘‘(A) IN GENERAL.—The term ‘qualified 1 taxi medallion indebtedness’ means indebted- 2 ness which— 3 ‘‘(i) is secured by a taxi medallion, 4 and 5 ‘‘(ii) with respect to which such tax- 6 payer makes an election to have this para- 7 graph apply. 8 ‘‘(B) LIMITATION.—With respect to a tax- 9 payer, the aggregate amount treated as quali- 10 fied taxi medallion indebtedness for any period 11 shall not exceed $2,000,000 ($1,000,000 in the 12 case of a married individual filing a separate re- 13 turn). 14 ‘‘(C) EXCEPTION FOR CERTAIN DIS- 15 CHARGES NOT RELATED TO TAXPAYER’S FINAN- 16 CIAL CONDITION.—Subsection (a)(1)(F) shall 17 not apply to the discharge of a loan if the dis- 18 charge is on account of services performed for 19 the lender or any other factor not directly re- 20 lated to a decline in the value of the taxi medal- 21 lion or to the financial condition of the tax- 22 payer. 23 ‘‘(D) ORDERING RULE.—If any loan is dis- 24 charged, in whole or in part, and only a portion 25 VerDate Sep 11 2014 04:40 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5617.IH H5617 4 •HR 5617 IH of such loan is qualified taxi medallion indebt- 1 edness, subsection (a)(1)(F) shall apply only to 2 so much of the amount discharged as exceeds 3 the amount of the loan (as determined imme- 4 diately before such discharge) which is not 5 qualified taxi medallion indebtedness.’’. 6 (c) CONFORMING AMENDMENTS.— 7 (1) Section 108(a)(2) of such Code is amended 8 by adding at the end the following new subpara- 9 graph: 10 ‘‘(D) TAXI MEDALLION EXCLUSION TAKES 11 PRECEDENCE OVER INSOLVENCY EXCLUSION 12 UNLESS ELECTED OTHERWISE.—Paragraph 13 (1)(B) shall not apply to a discharge to which 14 paragraph (1)(F) applies unless the taxpayer 15 elects to apply paragraph (1)(B) in lieu of para- 16 graph (1)(F).’’. 17 (d) EFFECTIVE DATE.—The amendments made by 18 this section shall apply to discharges of indebtedness after 19 December 31, 2016. 20 Æ VerDate Sep 11 2014 04:40 Jan 17, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H5617.IH H5617