119-s969

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 969 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 969

 To amend the Internal Revenue Code of 1986 to deny interest and 
 depreciation deductions for taxpayers owning 50 or more single family 
 properties.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 March 11 (legislative day, March 10), 2025

 Mr. Warnock (for himself, Ms. Smith, Mr. Wyden, Ms. Baldwin, Ms. 
 Warren, Mr. Gallego, Mr. Reed, Mr. Sanders, Ms. Klobuchar, Mr. Welch, 
 Mr. Blumenthal, and Mr. Booker) introduced the following bill; which 
 was read twice and referred to the Committee on Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to deny interest and 
 depreciation deductions for taxpayers owning 50 or more single family 
 properties.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Stop Predatory Investing Act''.

SEC. 2. DISALLOWANCE OF INTEREST DEDUCTION FOR DISQUALIFIED SINGLE 
 FAMILY PROPERTY OWNERS.

    (a) In General.--

Section 163 of the Internal Revenue Code of 1986 
is amended by redesignating subsection

    (n) as subsection

    (o) and by 
inserting after subsection
            (m) the following new subsection:
 ``

    (n) Interest Paid by Certain Disqualified Single Family Property 
Owners.--
 ``

    (1) In general.--In the case of a disqualified single 
 family property owner, no deduction shall be allowed under this 
 chapter for any interest paid or accrued in connection with any 
 single family residential rental property owned (directly or 
 indirectly) by such disqualified single family property owner.
 ``

    (2) Exception.--
 ``
        (A) In general.--Paragraph

    (1) shall not apply 
 with respect to interest paid or accrued in the taxable 
 year in which such single family residential rental 
 property is sold.
 ``
        (B) Exception.--Subparagraph
        (A) shall not apply 
 unless the sale described in such subparagraph is--
 ``
            (i) a sale to an individual for use as 
 the principle residence of the individual 
 (within the meaning of 

section 121), or
 ``
            (ii) a sale to any qualified nonprofit 
 organization.
 ``
            (C) Qualified nonprofit organization.--
 ``
            (i) In general.--For purposes of this 
 paragraph, the term `qualified nonprofit 
 organization' means any organization which--
 ``
            (I) is not organized for profit, 
 and
 ``
            (II) has as a principal purpose 
 the creation, development, or 
 preservation of affordable housing.
 ``
            (ii) Certain organizations included.--The 
 term `qualified nonprofit organization' shall 
 include--
 ``
            (I) any community development 
 corporation (as defined in 

section 204

    (b) of the Department of Veterans 
 Affairs and Housing and Urban 
 Development, and Independent Agencies 
 Appropriations Act, 1997 (12 U.S.C. 
 1715z-11a

    (b) ),
 ``
            (II) any community housing 
 development organization (as defined in 
 

section 104 of the Cranston-Gonzales 
 National Affordable Housing Act (42 
 U.S.C. 12704),
 ``
            (III) any community-based 
 development organization qualified 
 under 

section 570.204 of title 24, Code 
 of Federal Regulations, as in effect on 
 the date of the enactment of this 
 subsection,
 ``
            (IV) any land bank,
 ``
            (V) any resident-owned 
 cooperative or community land trust, 
 and
 ``
            (VI) any subsidiary of a public 
 housing agency (as defined in 

section 3

    (b)

    (6) of the United States Housing 
 Act of 1937 (42 U.S.C. 1437a

    (b)

    (6) ).
 ``
            (iii) Land bank.--For purposes of this 
 subparagraph, the term `land bank' means a 
 government entity, agency, or program, or a 
 special purpose nonprofit entity formed by one 
 or more units of government in accordance with 
 State or local land bank enabling law, that has 
 been designated by one or more State or local 
 governments to acquire, steward, and dispose of 
 vacant, abandoned, or other problem properties 
 in accordance with locally-determined 
 priorities and goals.
 ``
            (iv) Community land trust.--For purposes 
 of this subparagraph, the term `community land 
 trust' means a nonprofit organization or State 
 or local government or instrumentality that--
 ``
            (I) use a ground lease or deed 
 covenant with an affordability period 
 of at least 30 years or more to--
 ``

    (aa) make rental and 
 homeownership units affordable 
 to households; and
 ``

    (bb) stipulate a 
 preemptive option to purchase 
 the affordable rentals or 
 homeownership units so that the 
 affordability of the units is 
 preserved for successive 
 income-eligible households; and
 ``
            (II) monitors properties to 
 ensure affordability is preserved.
 ``

    (3) Disqualified single family property owner.--For 
 purposes of this subsection--
 ``
        (A) In general.--The term `disqualified single 
 family property owner' means, with respect to any 
 taxable year, any taxpayer who owns (directly or 
 indirectly) 50 or more single family residential rental 
 properties.
 ``
        (B) Aggregation rules.--All persons treated as a 
 single employer under subsection

    (a) or

    (b) of 

section 52, or subsection
            (m) or

    (o) of 

section 414, shall be 
 treated as one taxpayer for purposes of this section.
 ``
            (C) Modifications.--
 ``
            (i) In general.--For purposes of applying 
 subparagraph
        (B) --
 ``
            (I) section 52

    (a) shall be 
 applied by substituting `component 
 members' for `members', and
 ``
            (II) for purposes of applying 
 

section 52

    (b) , the term `trade or 
 business' shall include any activity 
 treated as a trade or business under 
 paragraph

    (5) or

    (6) of 

section 469
            (c) (determined without regard to the 
 phrase `To the extent provided in 
 regulations' in such paragraph

    (6) ).
 ``
            (ii) Component member.--For purposes of 
 this paragraph, the term `component member' has 
 the meaning given such term by 

section 1563

    (b) , 
 except that the determination shall be made 
 without regard to 

section 1563

    (b)

    (2) .
 ``
            (iii) No inference.--The modifications 
 made by clause
            (i) shall not be construed to 
 create any inference with respect to the proper 
 application of 

section 52 with respect to any 
 other provision of this title.
 ``

    (4) Single family residential rental property.--For 
 purposes of this subsection--
 ``
        (A) In general.--The term `single family 
 residential rental property' means--
 ``
            (i) any residential rental property (as 
 defined in 

section 168

    (e)

    (2)
        (A)
            (i) ) which 
 contains 4 or fewer dwelling units (as defined 
 in 

section 168

    (e)

    (2)
        (A)
            (ii) 
            (I) ), and
 ``
            (ii) improvements to real property 
 directly related to such dwelling units located 
 on the site of such dwelling units.
 For purposes of clause
            (i) , each townhouse or rowhouse 
 shall be treated as a separate building.
 ``
        (B) Exception for certain properties.--Such term 
 shall not include any residential rental property (as 
 so defined)--
 ``
            (i) with respect to which a credit is 
 allowed under 

section 42 for such taxable year 
 or any property, or
 ``
            (ii) which--
 ``
            (I) was constructed by the 
 taxpayer, or
 ``
            (II) acquired by the taxpayer 
 after its construction but before the 
 first date on which any dwelling unit 
 in such property was occupied by a 
 resident.
 ``

    (5) Regulations.--The Secretary shall prescribe such 
 regulations as may be necessary or appropriate to carry out the 
 purposes of this subsection, including regulations to prevent 
 the avoidance of the purposes of this subsection.''.

    (b) Application to Capitalized Amounts.--

    (1) In general.--

Section 263A

    (f)

    (2) of the Internal Revenue 
 Code of 1986 is amended by adding at the end the following new 
 subparagraph:
 ``
            (D) Exception for certain interest of 
 disqualified single family property owners.--
 Subparagraph
        (A) shall not apply to any interest for 
 which a deduction would be disallowed under 

section 163

    (n) .''.

    (2) Carrying charges.--

Section 266 of such Code is 
 amended--
        (A) by striking ``No deduction'' and inserting the 
 following:
 ``

    (a) In General.--No deduction'', and
        (B) by adding at the end the following new 
 subsection:
 ``

    (b) Special Rule for Certain Interest of Disqualified Single 
Family Property Owners.--No election may be made under this section to 
treat as chargeable to capital account any interest for which a 
deduction would be disallowed under 

section 163

    (n) .''.
            (c) Effective Date.--The amendments made by this section shall 
apply to indebtedness incurred in taxable years beginning after the 
date of the enactment of this Act.

SEC. 3. DISALLOWANCE OF DEPRECIATION IN CONNECTION WITH PROPERTY USED 
 BY DISQUALIFIED SINGLE FAMILY PROPERTY OWNERS.

    (a) In General.--

Section 167 of the Internal Revenue Code of 1986 
is amended by redesignating subsection
            (i) as subsection

    (j) and by 
inserting after subsection

    (h) the following new subsection:
 ``
            (i) Deduction Disallowed for Disqualified Single Family Property 
Owners.--
 ``

    (1) In general.--In the case of a disqualified single 
 family property owner, no deduction shall be allowed under this 
 section for any single family residential rental property owned 
 by such disqualified single family property owner.
 ``

    (2) Exception.--
 ``
        (A) In general.--Paragraph

    (1) shall not apply 
 with respect to depreciation deduction which is 
 allowable--
 ``
            (i) in connection with a single family 
 residential rental property, and
 ``
            (ii) in the taxable year in which such 
 single family residential rental property is 
 sold.
 ``
        (B) Exception.--Subparagraph
        (A) shall not apply 
 unless the sale described in clause
            (ii) thereof is--
 ``
            (i) a sale to an individual for use as 
 the principle residence of the individual 
 (within the meaning of 

section 121), or
 ``
            (ii) a sale to any qualified nonprofit 
 organization (as defined in 

section 163

    (n)

    (2)
            (C) ).
 ``

    (3) === Definitions. ===
-For purposes of this subsection, the 
 terms `disqualified single family property owner' and `single 
 family residential rental property' have the respective 
 meanings given such terms under 

section 163

    (n) .
 ``

    (4) Regulations.--The Secretary shall prescribe such 
 regulations as may be necessary or appropriate to carry out the 
 purposes of this subsection, including regulations to prevent 
 the avoidance of the purposes of this subsection.''.

    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years beginning after 
the date of the enactment of this Act.
 <all>