To amend the Internal Revenue Code of 1986 to exempt from personal use rules the use of vacation property as a residence for persons displaced by Hurricane Katrina.

September 15, 2005

Mrs. JO ANN DAVIS of Virginia introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to exempt from personal use rules the use of vacation property as a residence for persons displaced by Hurricane Katrina.

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

SECTION 1. USE OF VACATION HOMES BY PERSONS DISPLACED BY HURRICANE KATRINA.

(a) In General- Section 280A of the Internal Revenue Code of 1986 (relating to disallowance of certain expenses in connection with business use of home, rental of vacation homes, etc.) is amended by adding at the end the following:

`(h) Use of Dwelling Unit by Persons Displaced by Disaster-

`(1) IN GENERAL- For purposes of subsection (d), in the case of any taxable year beginning in 2005, a taxpayer shall not be treated as using a dwelling unit for personal purposes by reason of an arrangement for any period if for such period such dwelling unit--

`(A) is used by a natural person who is displaced by Hurricane Katrina, and

`(B) is provided free of charge by the taxpayer for use as such person's principal residence.

`(2) SPECIAL RULE RELATING TO ALLOCATION OF EXPENSES- For purposes of subsection (e), a dwelling unit shall be treated as rented at fair rental on any day of the taxable year on which paragraph (1) applies to the use of such dwelling unit.'.

(b) Effective Date- The amendment made by subsection (a) shall apply to taxable years ending after the date of the enactment of this Act.

END