Current status is Referred to the Committee on Ways and Means, and in addition to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

119th CONGRESS

1st Session

H. R. 3588

1. Short title
2. Returns with respect to foreign persons holding direct investments in United States real property interests
3. Report on foreign prohibition of United States ownership of real property interests
4. Imposition of tax on the acquisition of United States real property by disqualified persons

1. Short title

This Act may be cited as the "Real Estate Reciprocity Act".

2. Returns with respect to foreign persons holding direct investments in United States real property interests

(a) Required return - Section 6039C(a) of the Internal Revenue Code of 1986 is amended by striking "To the extent provided in regulations, any" and inserting "Any".

(b) Dollar threshold removed - Section 6039C(b) of such Code is amended by striking "during any calendar year if—" and all that follows through the period and inserting "during any calendar year if such person did not engage in a trade or business in the United States at any time during such calendar year".

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

3. Report on foreign prohibition of United States ownership of real property interests

Not later than 60 days after the date of the enactment of this Act, and annually thereafter, the Secretary of State shall provide to the Secretary of the Treasury a report describing all foreign countries that prohibit the purchase or ownership of real estate by citizens of the United States.

4. Imposition of tax on the acquisition of United States real property by disqualified persons

(a) In general - Subtitle D is amended by inserting after chapter 50A the following new chapter:

(b) Reporting requirements

(1) In general - Subpart B of part III of subchapter A of chapter 61 is amended by adding at the end the following new section:

6050AA. Returns relating to acquisition of United States real property by disqualified persons

(a) In general - The required reporting person, with respect to any acquisition of any United States real property by a presumptively disqualified person to which section 5000E(a) applies, shall make a return at such time as the Secretary may provide setting forth—

(1) - the name, address, and TIN of such presumptively disqualified person,

(2) - a description of such United States real property (including the street address, if applicable), and

(3) - the amount paid for such United States real property.

(b) Statement To be furnished to presumptively disqualified person - Every person required to make a return under subsection (a) shall furnish, at such time as the Secretary may provide, to each presumptively disqualified person whose name is required to be set forth in such return a written statement showing—

(1) - the name and address of the information contact of the required reporting person, and

(2) - the information described in paragraphs (1), (2), and (3) of subsection (a) which relates to such disqualified person.

(c) Required reporting person - For purposes of this section, the term "required reporting person" means, with respect to any acquisition of any United States real property—

(1) - the person (including any attorney or title company) responsible for closing the transaction in which such United States real property is acquired, or

(2) - if no one is responsible for closing such transaction (or in such other cases as the Secretary may provide), the transferor of such United States real property.

(d) Presumptively disqualified person - For purposes of this section, the term "presumptively disqualified person" means any person unless such person furnishes to the required reporting person an affidavit by the such person stating, under penalty of perjury, that such person is not a disqualified person (as defined in section 5000E(b)).

(e) Requirement To request affidavit - If the required reporting person, with respect to any acquisition of any United States real property, has not, as of the time of such acquisition, been furnished the affidavit described in subsection (d) by the acquirer of such interest, such required reporting person shall furnish to such acquirer, at such time, a written statement informing such acquirer of the required reporting person’s obligation to make the return described in subsection (a) with respect to such acquisition and including such other information as the Secretary may require.

(f) United States real property - For purposes of this section, the term "United States real property" has the meaning given such term in section 5000E.

(2) Penalties - Section 6724(d) is amended—

(A) - in paragraph (1)(B), by striking "or" at the end of clause (xxvii), by striking "and" at the end of clause (xxviii) and inserting "or", and by adding at the end the following new clause:

(xxix) - section 6050AA(a) (relating to returns relating to acquisition of United States real property by disqualified persons), and

(B) - in paragraph (2), by striking "or" at the end of subparagraph (KK), by striking the period at the end of subparagraph (LL) and inserting ", or", and by inserting after subparagraph (LL) the following new subparagraph:

(MM) - subsection (b) or (e) of section 6055AA (relating to statements relating to acquisition of United States real property by disqualified persons).

(1) - The table of chapters for subtitle D is amended by inserting after the item relating to chapter 50A the following new item:

(2) - The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by adding at the end the following new item:

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

119-HR3588

Real Estate Reciprocity Act