Page:United States Statutes at Large Volume 102 Part 4.djvu/677

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3647

meaning of section 148(f)(6)(A)) after the close of such period, "(ii) EXCEPTION.—Clause (i) (and clause (iv) of subparagraph (A)) shall not be construed to require amounts of less than $250,000 to be used to redeem bonds. The Secretary may by regulation treat related issues as 1 issue for purposes of the preceding sentence." (f) REPAYMENTS OF FINANCING PROVIDED BY A QUALIFIED MORTGAGE ISSUE MUST B E USED TO REDEEM BONDS.—Subparagraph (A) of

section 143(a)(2) of the 1986 Code is amended by striking out "and" at the end of clause (ii), by striking out the period at the end of clause (iii) and inserting in lieu thereof '\ and", and by adding at the end thereof the following: "(iv) except as provided in subparagraph (D)(ii), repayments of principal on financing provided by the issue are used not later than the close of the 1st semiannual period beginning after the date the prepayment (or complete repa3rment) is received to redeem bonds which are part of such issue. Clause (iv) shall not apply to amounts received within 10 years after the date of issuance of the issue (or, in the case of refunding bond, the date of issuance of the original bond)." (g) RECAPTURE OF PORTION OF FEDERAL SUBSIDY FROM U S E OF MORTGAGE BONDS AND MORTGAGE CREDIT CERTIFICATES.—

(1) IN GENERAL.—Section 143 of the 1986 Code (relating to mortgage revenue bonds) is amended by adding at the end thereof the following new subsection: "(m) RECAPTURE OF PORTION OF FEDERAL SUBSIDY FROM U S E OF QUALIFIED MORTGAGE BONDS AND MORTGAGE CREDIT CERTIFICATES.—

"(1) IN GENERAL.—If, during the taxable year, any taxpayer disposes of an interest in a residence with respect to which there is or was any federally-subsidized indebtedness for the payment of which the taxpayer was liable in whole or part, then the taxpayer's tax imposed by this chapter for such taxable year shall be increased by the recapture amount with respect to such indebtedness. "(2) EXCEPTIONS.—Paragraph (1) shall not apply to— "(A) any disposition by reason of death, and "(B) any disposition which is more than 10 years after the testing date. "(3) FEDERALLY-SUBSIDIZED INDEBTEDNESS.—For purposes of

this subsection— "(A) IN GENERAL.—The term 'federally-subsidized indebtedness' means any indebtedness if— "(i) financing for the indebtedness was provided in whole or part from the proceeds of any tax-exempt qualified mortgage bond, or "(ii) any credit was gdlowed under section 25 (relating to interest on certain home mortgages) to the taxpayer for interest paid or incurred on such indebtedness. "(B) EXCEPTION FOR HOME IMPROVEMENT LOANS.—Such

term shall not include any indebtedness to the extent such indebtedness is federally-subsidized indebtedness solely by reason of being a qualified home improvement loan (as defined in subsection (k)(4)).

�