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AB-198 Personal income taxes: deductions: first-time home buyers.(2017-2018)

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Date Published: 04/17/2017 09:00 PM
AB198:v97#DOCUMENT

Amended  IN  Assembly  April 17, 2017
Amended  IN  Assembly  March 20, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 198

Introduced by Assembly Member Patterson
(Coauthors: Assembly Members Brough, Gallagher, Lackey, Steinorth, Acosta, Baker, Chávez, Harper, Mathis, Mayes, Acosta, Travis Allen, Baker, Brough, Chávez, Gallagher, Gipson, Harper, Lackey, Mathis, Mayes, Steinorth, Voepel, and Waldron)

January 23, 2017

An act to amend Section 17072 of, and to add and repeal Section 17206.2 to, of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 198, as amended, Patterson. Personal income taxes: deductions: first-time home buyers.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law, including deductions for payments to individual retirement accounts, alimony payments, and interest on educational loans.
This bill, for taxable years beginning on or after January 1, 2017, and before January 1, 2022, would allow a deduction in computing adjusted gross income for those amounts paid or incurred by a qualified first-time home buyer, as defined, during the taxable year for qualified home-buying expenses, as provided.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17072 of the Revenue and Taxation Code is amended to read:

17072.
 (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.
(d) For taxable years beginning on or after January 1, 2017, and before January 1, 2022, Section 62(a) of the Internal Revenue Code is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.

SEC. 2.

 Section 17206.2 is added to the Revenue and Taxation Code, to read:

17206.2.
 (a) For taxable years beginning on or after January 1, 2017, and before January 1, 2022, there shall be allowed as a deduction the amount paid or incurred by a qualified first-time home buyer during the taxable year for qualified principal home-buying expenses for the purchase of a qualified residence. principal residence that is purchased that taxable year.
(b) For the purposes of this section:
(1)  “Qualified first-time home buyer” means any individual, or the individual’s spouse, who has never had an ownership interest in a principal residence. residence and who is eligible for the homeowner’s property tax exemption, with regard to the qualified principal residence, for the taxable year in which the deduction is claimed.
(2) “Qualified home-buying expenses” means the one-time costs paid or incurred by the qualified first-time home buyer relating to the purchase of a qualified principal residence during the taxable year, including, but not limited to, closing costs, notarization fees, and home inspection fees. “Qualified home-buying expenses” shall not include a downpayment on the qualified principal residence. “Qualified home-buying expenses” may be paid or incurred during the preceding 12-month period ending on the date of the purchase of the qualified principal residence.
(3) “Qualified principal residence” means a single-family residence, whether detached or attached, that is purchased to be the principal residence of the taxpayer for a minimum of two years and is eligible for the homeowner’s exemption under Section 218. meets all of the following requirements:
(A) It is purchased to be the qualified principal residence of the taxpayer for a minimum of two years.
(B) It is eligible for the homeowner’s exemption under Section 218.
(C) The purchase price does not exceed the amount established as the conforming loan limit, as determined by Section 1454(a)(2) of Title 12 of the United States Code, for that type of residence.
(c) This section shall remain in effect only until December 1, 2022, and as of that date is repealed.

SEC. 3.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.