
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)[163]]
[Document affected by Public Law 107-16 Section 201(b)(2)(H)]
[Document affected by Public Law 107-16 Section 202(f)(2)(C)]
[Document affected by Public Law 107-16 Section 618(b)(2)(E)]
[CITE: 26USC1400C]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
           Subchapter W--District of Columbia Enterprise Zone
 
Sec. 1400C. First-time homebuyer credit for District of Columbia


(a) Allowance of credit

    In the case of an individual who is a first-time homebuyer of a 
principal residence in the District of Columbia during any taxable year, 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to so much of the purchase 
price of the residence as does not exceed $5,000.

(b) Limitation based on modified adjusted gross income

                           (1) In general

        The amount allowable as a credit under subsection (a) 
    (determined without regard to this subsection and subsection (d)) 
    for the taxable year shall be reduced (but not below zero) by the 
    amount which bears the same ratio to the credit so allowable as--
            (A) the excess (if any) of--
                (i) the taxpayer's modified adjusted gross income for 
            such taxable year, over
                (ii) $70,000 ($110,000 in the case of a joint return), 
            bears to

            (B) $20,000.

                 (2) Modified adjusted gross income

        For purposes of paragraph (1), the term ``modified adjusted 
    gross income'' means the adjusted gross income of the taxpayer for 
    the taxable year increased by any amount excluded from gross income 
    under section 911, 931, or 933.

(c) First-time homebuyer

    For purposes of this section--

                           (1) In general

        The term ``first-time homebuyer'' means any individual if such 
    individual (and if married, such individual's spouse) had no present 
    ownership interest in a principal residence in the District of 
    Columbia during the 1-year period ending on the date of the purchase 
    of the principal residence to which this section applies.

                          (2) One-time only

        If an individual is treated as a first-time homebuyer with 
    respect to any principal residence, such individual may not be 
    treated as a first-time homebuyer with respect to any other 
    principal residence.

                       (3) Principal residence

        The term ``principal residence'' has the same meaning as when 
    used in section 121.

(d) Carryover of credit

    If the credit allowable under subsection (a) exceeds the limitation 
imposed by section 26(a) for such taxable year reduced by the sum of the 
credits allowable under subpart A of part IV of subchapter A (other than 
this section), such excess shall be carried to the succeeding taxable 
year and added to the credit allowable under subsection (a) for such 
taxable year.

(e) Special rules

    For purposes of this section--

                 (1) Allocation of dollar limitation

        (A) Married individuals filing separately

            In the case of a married individual filing a separate 
        return, subsection (a) shall be applied by substituting 
        ``$2,500'' for ``$5,000''.

        (B) Other taxpayers

            If 2 or more individuals who are not married purchase a 
        principal residence, the amount of the credit allowed under 
        subsection (a) shall be allocated among such individuals in such 
        manner as the Secretary may prescribe, except that the total 
        amount of the credits allowed to all such individuals shall not 
        exceed $5,000.

                            (2) Purchase

        (A) In general

            The term ``purchase'' means any acquisition, but only if--
                (i) the property is not acquired from a person whose 
            relationship to the person acquiring it would result in the 
            disallowance of losses under section 267 or 707(b) (but, in 
            applying section 267(b) and (c) for purposes of this 
            section, paragraph (4) of section 267(c) shall be treated as 
            providing that the family of an individual shall include 
            only his spouse, ancestors, and lineal descendants), and
                (ii) the basis of the property in the hands of the 
            person acquiring it is not determined--
                    (I) in whole or in part by reference to the adjusted 
                basis of such property in the hands of the person from 
                whom acquired, or
                    (II) under section 1014(a) (relating to property 
                acquired from a decedent).

        (B) Construction

            A residence which is constructed by the taxpayer shall be 
        treated as purchased by the taxpayer on the date the taxpayer 
        first occupies such residence.

                         (3) Purchase price

        The term ``purchase price'' means the adjusted basis of the 
    principal residence on the date such residence is purchased.

(f) Reporting

    If the Secretary requires information reporting under section 6045 
by a person described in subsection (e)(2) thereof to verify the 
eligibility of taxpayers for the credit allowable by this section, the 
exception provided by section 6045(e)(5) shall not apply.

(g) Credit treated as nonrefundable personal credit

    For purposes of this title, the credit allowed by this section shall 
be treated as a credit allowable under subpart A of part IV of 
subchapter A of this chapter.

(h) Basis adjustment

    For purposes of this subtitle, if a credit is allowed under this 
section with respect to the purchase of any residence, the basis of such 
residence shall be reduced by the amount of the credit so allowed.

(i) Application of section

    This section shall apply to property purchased after August 4, 1997, 
and before January 1, 2004.

(Added Pub. L. 105-34, title VII, Sec. 701(a), Aug. 5, 1997, 111 Stat. 
867; amended Pub. L. 105-206, title VI, Sec. 6008(d)(1)-(5), July 22, 
1998, 112 Stat. 811, 812; Pub. L. 106-170, title V, Sec. 510, Dec. 17, 
1999, 113 Stat. 1924; Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 163], 
Dec. 21, 2000, 114 Stat. 2763, 2763A-625.)


                               Amendments

    2000--Subsec. (i). Pub. L. 106-554 substituted ``2004'' for 
``2002''.
    1999--Subsec. (i). Pub. L. 106-170 substituted ``2002'' for 
``2001''.
    1998--Subsec. (b)(1). Pub. L. 105-206, Sec. 6008(d)(1), inserted 
``and subsection (d)'' after ``this subsection'' in introductory 
provisions.
    Subsec. (c)(1). Pub. L. 105-206, Sec. 6008(d)(2), reenacted heading 
without change and amended text generally. Prior to amendment, text read 
as follows: ``The term `first-time homebuyer' has the same meaning as 
when used in section 72(t)(8)(D)(i), except that `principal residence in 
the District of Columbia during the 1-year period' shall be substituted 
for `principal residence during the 2-year period' in subclause (I) 
thereof.''
    Subsec. (e)(2)(B). Pub. L. 105-206, Sec. 6008(d)(3), inserted ``on 
the date the taxpayer first occupies such residence'' before the period 
at end.
    Subsec. (e)(3). Pub. L. 105-206, Sec. 6008(d)(4), substituted ``on 
the date such residence is purchased.'' for ``on the date of acquisition 
(within the meaning of section 72(t)(8)(D)(iii)).''
    Subsec. (i). Pub. L. 105-206, Sec. 6008(d)(5), substituted 
``Application of section'' for ``Termination'' in heading and amended 
text generally. Prior to amendment, text read as follows: ``This section 
shall not apply to any property purchased after December 31, 2000.''


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-206 effective, except as otherwise 
provided, as if included in the provisions of the Taxpayer Relief Act of 
1997, Pub. L. 105-34, to which such amendment relates, see section 6024 
of Pub. L. 105-206, set out as a note under section 1 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 23, 25, 1016 of this title.
