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119-s-4080119th CongressWALLET

Rental Housing Investment Act

Sponsored By: Senator Blunt Rochester, Lisa [D-DE]

Introduced

Summary

Large immediate depreciation for new long-term residential rental properties. This bill would let taxpayers elect a big first-year depreciation allowance for multi-unit rental buildings placed in service in the United States.

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  • Developers and investors would be able to claim a first-year deduction equal to the lesser of the number of dwelling units times $150,000 or 100% of the building's adjusted basis (land excluded). This reduces taxable income in year one for qualifying projects.
  • Projects that meet the low-income housing rules in Section 42(g)(1) could use a higher per-unit cap of $250,000, but an owner who stops meeting those affordable-housing requirements during a 15-year window faces recapture rules.
  • The break applies only to properties with at least 2 units whose original use begins with the taxpayer, requires an election on the tax return that is generally irrevocable, and calls for IRS guidance and certification; special rules affect the Alternative Minimum Tax and a 10-year recapture if the property ceases qualifying sooner.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

Big first-year tax break for landlords

If enacted, rental property owners would be able to elect a large first-year depreciation deduction for qualifying multi-unit residential buildings. The allowance would be the lesser of (A) the number of dwelling units times $150,000 (or $250,000 per unit if the property is in an eligible affordable-housing project and the taxpayer elects that treatment), or (B) 100% of the property's adjusted basis excluding land. You would make the election on your tax return and the property's basis would be reduced by the allowance before computing other depreciation. If the property stops meeting the qualifying rules within 10 years (or within 15 years for the affordable-housing election), or when sold, the IRS would apply ordinary-income recapture rules and adjust your basis and depreciation; the deduction is also computed for AMT without the usual section 56 adjustment.

Sponsors & CoSponsors

Sponsor

Blunt Rochester, Lisa [D-DE]

DE • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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