109th CONGRESS

1st Session

H. R. 3268

To amend the Internal Revenue Code of 1986 to exclude from gross income gain from the conversion of property by reason of eminent domain.

IN THE HOUSE OF REPRESENTATIVES

July 13, 2005

Mr. GINGREY (for himself, Mr. AKIN, Mr. PITTS, Ms. HART, Ms. FOXX, Mr. SHADEGG, Mr. GRAVES, and Mr. MACK) introduced the following bill; which was referred to the Committee on Ways and Means

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A BILL

To amend the Internal Revenue Code of 1986 to exclude from gross income gain from the conversion of property by reason of eminent domain.

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 `Eminent Domain Tax Relief Act of 2005'.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR GAIN FROM DISPOSITION OF PROPERTY BY REASON OF EMINENT DOMAIN.

(a) In General- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section:

`SEC. 139B. GAIN FROM DISPOSITION OF PROPERTY BY REASON OF EMINENT DOMAIN.

`(a) In General- Gross income shall not include gain from the conversion (or threat or imminence thereof) of property in the United States by reason of the exercise of eminent domain by a governmental unit having the power to exercise eminent domain.

`(b) Coordination With Other Nonrecognition Provisions-

`(1) GAIN- Gain excluded under subsection (a) shall not be treated as gain recognized or an amount realized for purposes of sections 467, 637(d), 1033, 1245, 1250, 1252, 1254, 1255, and 1402.

`(2) SECTION 1231- Section 1231 shall be applied without regard to this section.

`(3) HOLDING PERIOD- Section 1223(1) shall not apply.

`(c) Election not to Claim Credit- This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year. '.

(b) Clerical Amendment- The table of sections for such part is amended by inserting after the item relating to section 139A the following new item:

`Sec. 139B. Gain from disposition of property by reason of eminent domain.'.

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