To amend the Internal Revenue Code of 1986 to provide for an enhanced deduction for qualified residence interest on acquisition indebtedness for heritage homes.

January 25, 2005

Mr. PLATTS introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to provide for an enhanced deduction for qualified residence interest on acquisition indebtedness for heritage homes.

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 `Heritage Homes Tax Incentive Act of 2005'.

SEC. 2. ENHANCED DEDUCTION FOR QUALIFIED RESIDENCE INTEREST ON ACQUISITION INDEBTEDNESS FOR HERITAGE HOMES.

(a) In General- Subsection (h) of section 163 of the Internal Revenue Code of 1986 (relating to disallowance of deduction for personal interest) is amended by adding at the end the following new paragraph:

`(6) HERITAGE HOME-

`(A) IN GENERAL- In the case of qualified residence interest which is paid or accrued on acquisition indebtedness incurred with respect to the heritage home of the taxpayer, the deduction under subsection (a) shall be 125 percent of the amount otherwise allowable by subsection (a).

`(B) HERITAGE HOME- For purposes of subparagraph (A), the term `heritage home' means the principal residence of the taxpayer--

`(i) the construction of which was substantially completed at least 50 years before the beginning of the taxable year,

`(ii) which is a certified historic structure (as defined in section 47(c)(3)(A)),

`(iii) which is located in a registered historic district (as defined in section 47(c)(3)(B)), or

`(iv) which is located on land which was platted for residential purposes at least 50 years prior to the beginning of the taxable year.'.

(b) Deduction Allowed Whether or not Taxpayer Itemizes Deductions- Subsection (a) of section 62 of such Code (defining adjusted gross income) is amended by inserting after paragraph (19) (relating to costs involving discrimination suits, etc.) the following new paragraph:

`(21) QUALIFIED RESIDENCE INTEREST ON ACQUISITION INDEBTEDNESS FOR HERITAGE HOMES- The deduction under section 163 for qualified residence interest on acquisition indebtedness with respect to the heritage home of the taxpayer. Terms used in the preceding sentence have the meanings given such terms by section 163.'

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

END