“To amend the Internal Revenue Code of 1986 to allow the establishment of homeownership savings accounts.”
No CRS summary available for this bill.
This section establishes homeownership savings accounts under the Internal Revenue Code and allows a deduction for cash contributions to such accounts by or on behalf of an account beneficiary. The annual deduction is limited to $3,000 for joint returns, $2,500 for heads of household, and $2,000 for other individuals, and may not exceed the beneficiary’s earned income (with special rules for joint filers). The maximum deduction phases out based on modified adjusted gross income, beginning at $242,000 for joint returns (over a $10,000 range), $200,000 for heads of household (over a $20,000 range), and $153,000 for other individuals (over a $15,000 range). Lifetime aggregate contributions to an account may not exceed $40,000, and the account beneficiary must be at least 18 years old and certify first-time homebuyer status under penalty of perjury. Qualified distributions are limited to down payments and closing costs for the purchase of a primary residence by a first-time homebuyer (as defined by reference to section 36(c)(1)), and the account is exempt from tax.