I 116TH CONGRESS 2D SESSION H. R. 6011 To amend the Internal Revenue Code of 1986 to allow for nonrecognition of gain on real property sold for use as affordable housing. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 27, 2020 Mr. SCHIFF 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 allow for nonrecognition of gain on real property sold for use as affordable housing. 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 ‘‘Affordable and Home- 4 less Housing Incentives Act of 2020’’. 5 SEC. 2. NONRECOGNITION OF GAIN ON PROPERTY SOLD 6 FOR USE AS AFFORDABLE HOUSING. 7 (a) IN GENERAL.—Section 1033 of the Internal Rev- 8 enue Code of 1986 is amended by redesignating subsection 9 VerDate Sep 11 2014 04:37 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6011.IH H6011 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 6011 IH (k) as subsection (l) and by inserting after subsection (j) 1 the following new subsection: 2 ‘‘(k) SALES FOR USE AS AFFORDABLE HOUSING.— 3 ‘‘(1) IN GENERAL.—For purposes of this sub- 4 title, if real property is sold or otherwise transferred 5 to a qualified housing operator for use or develop- 6 ment by such operator as affordable housing and 7 such property meets the requirements of paragraph 8 (3), such sale or transfer shall be treated as an in- 9 voluntary conversion to which this section applies. 10 ‘‘(2) QUALIFIED HOUSING OPERATOR.—For 11 purposes of this section, the term ‘qualified housing 12 operator’ means any of the following: 13 ‘‘(A) A State or local government, or any 14 political subdivision or instrumentality thereof. 15 ‘‘(B) A tribally designated housing entity 16 (as such term is defined in section 4 of the Na- 17 tive American Housing Assistance and Self-De- 18 termination Act of 1996). 19 ‘‘(C) A community housing development 20 organization (as such term is defined in section 21 104 of the Cranston-Gonzalez National Afford- 22 able Housing Act). 23 ‘‘(D) An organization— 24 VerDate Sep 11 2014 04:37 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6011.IH H6011 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 6011 IH ‘‘(i) described in section 501(c) and 1 exempt from taxation under section 2 501(a), 3 ‘‘(ii) the purpose of which includes 4 providing affordable housing, and 5 ‘‘(iii) which— 6 ‘‘(I) has received Federal, State, 7 or local grant funds to develop or op- 8 erate affordable housing, or 9 ‘‘(II) is described in section 10 42(h)(5)(B) with respect to a quali- 11 fied low-income housing project that is 12 allocated housing credit dollar 13 amounts under section 42. 14 ‘‘(3) AFFORDABLE HOUSING REQUIREMENT.— 15 The requirements of this paragraph are met with re- 16 spect to property if such property has, as of the date 17 of the sale or transfer referred to in paragraph (1), 18 a legal restriction or agreement sufficient to obligate 19 any owner to make (at all times during the 30-year 20 period beginning on such date) such property ei- 21 ther— 22 ‘‘(A) residential rental property (within the 23 meaning of section 168) not less than 75 per- 24 cent of the units of which are affordable to low- 25 VerDate Sep 11 2014 04:37 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6011.IH H6011 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 6011 IH income families and either occupied by or avail- 1 able for use by low-income residents, or 2 ‘‘(B) a shelter eligible for assistance under 3 title IV of the McKinney-Vento Homeless As- 4 sistance Act. 5 ‘‘(4) SPECIAL RULE WITH RESPECT TO PERIOD 6 WITHIN WHICH PROPERTY MUST BE REPLACED.—In 7 the case of a sale or transfer described in paragraph 8 (1), subsection (a)(2)(B)(i) shall be applied by sub- 9 stituting ‘3 years’ for ‘2 years’. 10 ‘‘(5) SPECIAL RULE FOR REAL PROPERTY HELD 11 FOR PRODUCTIVE USE IN TRADE OR BUSINESS.— 12 For purposes of subsection (a), if the real property 13 described in paragraph (1) is held for productive use 14 in a trade or business or for investment, property of 15 a like kind to be held either for productive use in a 16 trade or business or for investment shall be treated 17 as property similar or related in service or use to the 18 property so described.’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to sales and transfers after the 21 date of the enactment of this Act. 22 Æ VerDate Sep 11 2014 04:37 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H6011.IH H6011 kjohnson on DSK79L0C42PROD with BILLS