Disallowance of deduction of certain expenses related to single-family homes held by specified large investors

(a) In general Part IX of subchapter B of Chapter 1 of subtitle A of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 280I. Certain expenses related to single-family homes held by specified large investors (a) In general In the case of a specified large investor, no deduction shall be allowed under this chapter for the following expenses relating to the ownership of a single-family home: (1) Amounts paid or incurred for the interest on a mortgage relating to such single-family home or to insure such single-family home. (2) Depreciation of such single-family home. (b) Specified large investor For purposes of this section— (1) In general The term specified large investor means any person for any taxable year if the aggregate fair market value of all assets of such person (reduced by the aggregate debts of the taxpayer) exceeds $100,000,000 at any time during such taxable year. (2) Treatment of controlled groups For purposes of this subsection— (A) In general All persons which are part of a controlled group (within the meaning of section 1563(a) applied by substituting more than 50 percent for at least 80 percent each place it appears) shall be treated as 1 person. (B) Nonincorporated persons under common control Under regulations or other guidance provided by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of persons under common control where 1 or more of such persons is not a corporation. (3) Government entities and certain tax-exempt entities Such term shall not include either of the following: (A) Any governmental entity. (B) Any organization which is described in section 501(c)(3) and exempt from tax under section 501(a). (c) Single-Family home (1) In general For purposes of this section, the term single-family home means any real property located in the United States if such property includes at least 1 dwelling unit and not more than 4 dwelling units. (2) Exception for federally-assisted buildings For purposes of this section— (A) In general Such term shall not include any federally-assisted building. (B) Federally-assisted building The term federally-assisted building means any building— (i) which is substantially assisted, financed, or operated under section 8 of the United States Housing Act of 1937, section 221(d)(3), 221(d)(4), or 236 of the National Housing Act, section 515 of the Housing Act of 1949, or any other housing program administered by the Department of Housing and Urban Development or by the Rural Housing Service of the Department of Agriculture, (ii) with respect to which a credit is allowed to the taxpayer under section 42, or (iii) for which financing is provided by a qualified bond (within the meaning of section 141). (d) Exceptions (1) Principal residence In the case of a specified large investor who is an individual, subsection (a) shall not apply to any single-family home if such home is used as the principal residence of such investor. (2) Original construction or substantial rehabilitation Subsection (a) shall not apply with respect to a single-family home originally constructed or substantially rehabilitated (as defined in section 47(c)) by the taxpayer.. (b) Clerical amendment The table of sections for part IX of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 280H the following new item: Sec. 280I. Certain expenses related to single-family homes held by specified large investors.. (c) Effective date The amendments made by this section shall apply to amounts paid or incurred and depreciation that occurs after the date that is 18 months after the date of the enactment of this Act.