HR 7687
No Tax on Takings Act
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- Passed House
- Passed Senate
- To President
- Became Law
Bill overview
This bill, the No Tax on Takings Act, aims to prevent taxpayers from paying income tax on profits gained when the government takes their property through eminent domain. It specifically excludes any gain from the sale or exchange of property due to eminent domain, ensuring that property owners aren't penalized for the government's acquisition of their land. The bill clarifies that existing rules regarding involuntary conversions do not apply to eminent domain takings, and it allows taxpayers to opt-out of this exclusion.
Key provisions
- Excludes gain from the sale or exchange of property due to eminent domain from gross income.
- Does not apply to involuntary conversions as defined by existing tax law.
- Provides an option for taxpayers to elect not to claim the exclusion.
- Requires the Secretary of the Treasury to issue regulations clarifying the application of the law.
Who is affected
- Taxpayers
- Property owners
- Government entities (involved in eminent domain)
- Real estate developers
- Individuals and businesses owning property subject to eminent domain
Notable changes
- Modifies the Internal Revenue Code to address gains from eminent domain.
- Creates a new section (139M) specifically for this exclusion.
- Allows for a taxpayer election to opt-out of the exclusion.
Sponsors
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Primary sponsor
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119th CONGRESS — 2d Session
H. R. 7687
IN THE HOUSE OF REPRESENTATIVES
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.
This Act may be cited as the No Tax on Takings Act
.
Gross income shall not include gain from the conversion of property located in the United States by reason of the exercise of eminent domain (including the sale or exchange of such property under threat or imminence of such exercise).
The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.
The amendments made by this section shall apply to conversions in taxable years ending after the date of the enactment of this Act.