article: SECTION 1. HOMEBUYER CREDIT ALLOWED FOR ANY PURCHASE OF PRINCIPAL RESIDENCE. (a) In General.--Subsection (a) of section 36 of the Internal Revenue Code of 1986 is amended by striking ``who is a first-time homebuyer of a principal residence'' and inserting ``who purchases a principal residence''. (b) Application to Only 1 Sale.--Subsection (b) of section 36 of such Code is amended by adding at the end the following new paragraph: ``(3) Application to only 1 sale.-- ``(A) In general.--Subsection (a) shall not apply to more than 1 sale or exchange of a principal residence by the individual. ``(B) Special rule for joint returns.--In the case of a joint return with respect to the sale or exchange of a principal residence, if a credit was allowable under subsection (a) to a spouse for a prior sale or exchange of a principal residence, paragraph (1) shall be applied by reducing the $8,000 in subparagraph (A) thereof and the $4,000 in subparagraph (B) thereof by the credit so allowable (one-half of such credit in the case of a joint return).''. (c) Conforming Amendments.-- (1) Subsection (c) of section 36 of such Code is amended by striking paragraph (1) (defining first-time homebuyer) and by redesignating paragraphs (2), (3), (4), and (5) as paragraphs (1), (2), (3), and (4), respectively. (2) The heading for section 36 of such Code is amended by striking ``First-time''. (3) The item in the table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code relating to section 36 is amended to read as follows: ``Sec. Homebuyer credit.''. (d) Effective Date.--The amendments made by this section shall apply to residences purchased after the date of the enactment of this Act. SEC. 2. 1-YEAR EXTENSION OF HOMEBUYER CREDIT. (a) In General.--Subsection (h) of section 36 of the Internal Revenue Code is amended by striking ``December 1, 2009'' and inserting ``December 1, 2010''. (b) Extension of Waiver of Recapture.--Subparagraph (D) of section 36(f)(4) of such Code is amended-- (1) by striking ``December 1, 2009'' and inserting ``December 1, 2010'', and (2) in the heading by striking ``for purchases in 2009'' and inserting ``certain purchases''. (c) Election To Treat Purchase in Prior Year.--Subsection (g) of such Code is amended to read as follows: ``(g) Election To Treat Purchase in Prior Year.--For purposes of this section (other than subsections (c) and (f)(4)(D)), a taxpayer may elect to treat a purchase of a principal residence-- ``(1) after December 31, 2008, and before January 1, 2010, as made on December 31, 2008, and ``(2) after December 31, 2009, and before December 1, 2010, as made on December 31, 2009.''. (d) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act. SEC. 3. DEDUCTION FOR LOSS FROM SALE OF PRINCIPAL RESIDENCE. (a) In General.--Part VII of subchapter B of chapter I of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section: ``SEC. 224. LOSS FROM SALE OF PRINCIPAL RESIDENCE. ``(a) Allowance of Deduction.--In the case of an individual, there shall be allowed as a deduction for the taxable year any loss recognized on the sale or exchange of property during the taxable year if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating 2 years or more. ``(b) Limitations.-- ``(1) Aggregate limitation.--The aggregate amount allowed as a deduction under subsection (a) for all taxable years shall not exceed $6,000 ($12,000 in the case of a joint return). ``(2) Annual limitation.-- ``(A) In general.--The amount allowed to a taxpayer as a deduction under subsection (a) for a taxable year shall not exceed $2,000 ($4,000 in the case of a joint return). ``(B) Carryforward.--If the deduction allowable under subsection (a) for any taxable year exceeds the limitation imposed by subparagraph (A) for the taxable year, the excess shall be carried to each of the 2 succeeding taxable years and added to the deduction allowable under subsection (a) for such succeeding year. ``(3) Exclusion of loss allocated to nonqualified use.-- ``(A) In general.--Subsection (a) shall not apply to so much of the loss from the sale or exchange of property as is allocated to periods of nonqualified use. ``(B) Allocation.--For purposes of subparagraph (A), loss shall be allocated to periods of nonqualified use based on the ratio which-- ``(i) the aggregate periods of nonqualified use during the period such property was owned by the taxpayer, bears to ``(ii) the period such property was owned by the taxpayer. ``(C) Period of nonqualified use; coordination with recognition of gain attributable to depreciation.--For purposes of this paragraph, rules similar to the rules of subparagraphs (C) and (D) of section 121(b)(5) shall apply. ``(4) Application to only 1 sale.-- ``(A) In general.--Subsection (a) shall not apply to more than 1 sale or exchange of a principal residence by the taxpayer. ``(B) Special rule for joint returns.--In the case of a joint return with respect to the sale or exchange of a principal residence, if a deduction was allowable under subsection (a) to a spouse for a prior sale or exchange of a principal residence, paragraphs (1) and (2)(A) shall be applied by reducing the dollar amounts therein by the deduction so allowable (one-half of such deduction in the case of a joint return). ``(c) Applicable Rules.--For purposes of this section, rules similar to the rules of subsection (d) of section 121 shall apply, except that paragraph (6) thereof shall be applied by substituting `loss' for `gain'. ``(d) Election To Have Section Not Apply.--This section shall not apply to any sale or exchange with respect to which the taxpayer elects not to have this section apply. ``(e) Termination.--The section shall not apply to the sale or exchange of a principal residence after December 31, 2010.''. (b) Deduction Allowed in Computing Adjusted Gross Income.-- Subsection (a) of section 62 of such Code is amended by inserting before the last sentence the following new paragraph: ``(22) Loss from sale of principal residence.--The deduction allowed by section 224.''. (c) Clerical Amendments.--The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 224 and inserting the following: ``Sec. 224. Loss from sale of principal residence. ``Sec. 225. Cross reference.''. (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
summary: Amends the Internal Revenue Code relating to the first-time homebuyer tax credit to: (1) extend such credit to all purchasers of a principal residence; (2) limit the credit to one sale or exchange of a principal residence; and (3) extend such credit through November 30, 2010. Allows individual taxpayers a tax deduction through 2010 for losses from the sale or exchange of a principal residence.