Page:United States Statutes at Large Volume 111 Part 1.djvu/891

 PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 867 " (5) RELATED PARTY TRANSACTIONS.— The term 'qualified capital gain' shall not include any gain attributable, directly or indirectly, in whole or in part, to a transaction with a related person. For purposes of this paragraph, persons are related to each other if such persons are described in section 267(b) or 707(b)(1). "(f) CERTAIN OTHER RULES TO APPLY.— Rules similar to the rules of subsections (g), (h), (i)(2), and (j) of section 1202 shall apply for purposes of this section. "(g) SALES AND EXCHANGES OF INTERESTS IN PARTNERSHIPS AND S CORPORATIONS WHICH ARE DC ZONE BUSINESSES. —In the case of the sale or exchange of an interest in a partnership, or of stock in an S corporation, which was a DC Zone business during substantially all of the period the taxpayer held such interest or stock, the amount of qualified capital gain shall be determined without regard to— "(1) any gain which is attributable to real property, or an intangible asset, which is not an integral part of a DC Zone business, and "(2) any gain attributable to periods before January 1, 1998, or after December 31, 2007. "SEC. 1400C. FIRST-TIME HOMEBUYER CREDIT FOR DISTRICT OF COLUMBIA. "(a) ALLOWANCE OF CREDIT.— In the case of an individual who is a first-time homebuyer of a principal residence in the District of Columbia during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to so much of the purchase price of the residence as does not exceed $5,000. "(b) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.— "(1) IN GENERAL.— The amount allowable as a credit under subsection (a) (determined without regard to this subsection) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the credit so allowable as— "(A) the excess (if any) of— "(i) the taxpayer's modified adjusted gross income for such taxable year, over "(ii) $70,000 ($110,000 in the case of a joint return), bears to "(B) $20,000. "(2) MODIFIED ADJUSTED GROSS INCOME. —For purposes of paragraph (1), the term 'modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. "(c) FIRST-TIME HOMEBUYER. —For purposes of this section— "(1) IN GENERAL.— The term 'first-time homebuyer' has the same meaning as when used in section 72(t)(8)(D)(i), except that 'principal residence in the District of Columbia during the 1-year period' shall be substituted for 'principal residence during the 2-year period' in subclause (I) thereof. "(2) ONE-TIME ONLY. —I f an individual is treated as a firsttime homebuyer with respect to any principal residence, such

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