text: SECTION 1. HOMEBUYER CREDIT ALLOWED FOR ANY PURCHASE OF PRINCIPAL 
                RESIDENCE.
  
      (a) In General.--Subsection (a) of section 36 of the Internal 
  Revenue Code of 1986 is amended by striking ``who is a first-time 
  homebuyer of a principal residence'' and inserting ``who purchases a 
  principal residence''.
      (b) Application to Only 1 Sale.--Subsection (b) of section 36 of 
  such Code is amended by adding at the end the following new paragraph:
              ``(3) Application to only 1 sale.--
                      ``(A) In general.--Subsection (a) shall not apply 
                  to more than 1 sale or exchange of a principal 
                  residence by the individual.
                      ``(B) Special rule for joint returns.--In the case 
                  of a joint return with respect to the sale or exchange 
                  of a principal residence, if a credit was allowable 
                  under subsection (a) to a spouse for a prior sale or 
                  exchange of a principal residence, paragraph (1) shall 
                  be applied by reducing the $8,000 in subparagraph (A) 
                  thereof and the $4,000 in subparagraph (B) thereof by 
                  the credit so allowable (one-half of such credit in the 
                  case of a joint return).''.
      (c) Conforming Amendments.--
              (1) Subsection (c) of section 36 of such Code is amended by 
          striking paragraph (1) (defining first-time homebuyer) and by 
          redesignating paragraphs (2), (3), (4), and (5) as paragraphs 
          (1), (2), (3), and (4), respectively.
              (2) The heading for section 36 of such Code is amended by 
          striking ``First-time''.
              (3) The item in the table of sections for subpart C of part 
          IV of subchapter A of chapter 1 of such Code relating to 
          section 36 is amended to read as follows:
  
  ``Sec. Homebuyer credit.''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to residences purchased after the date of the enactment of this 
  Act.
  
  SEC. 2. 1-YEAR EXTENSION OF HOMEBUYER CREDIT.
  
      (a) In General.--Subsection (h) of section 36 of the Internal 
  Revenue Code is amended by striking ``December 1, 2009'' and inserting 
  ``December 1, 2010''.
      (b) Extension of Waiver of Recapture.--Subparagraph (D) of section 
  36(f)(4) of such Code is amended--
              (1) by striking ``December 1, 2009'' and inserting 
          ``December 1, 2010'', and
              (2) in the heading by striking ``for purchases in 2009'' 
          and inserting ``certain purchases''.
      (c) Election To Treat Purchase in Prior Year.--Subsection (g) of 
  such Code is amended to read as follows:
      ``(g) Election To Treat Purchase in Prior Year.--For purposes of 
  this section (other than subsections (c) and (f)(4)(D)), a taxpayer may 
  elect to treat a purchase of a principal residence--
              ``(1) after December 31, 2008, and before January 1, 2010, 
          as made on December 31, 2008, and
              ``(2) after December 31, 2009, and before December 1, 2010, 
          as made on December 31, 2009.''.
      (d) Effective Date.--The amendments made by this section shall take 
  effect on the date of the enactment of this Act.
  
  SEC. 3. DEDUCTION FOR LOSS FROM SALE OF PRINCIPAL RESIDENCE.
  
      (a) In General.--Part VII of subchapter B of chapter I of the 
  Internal Revenue Code of 1986 (relating to additional itemized 
  deductions for individuals) is amended by redesignating section 224 as 
  section 225 and by inserting after section 223 the following new 
  section:
  
  ``SEC. 224. LOSS FROM SALE OF PRINCIPAL RESIDENCE.
  
      ``(a) Allowance of Deduction.--In the case of an individual, there 
  shall be allowed as a deduction for the taxable year any loss 
  recognized on the sale or exchange of property during the taxable year 
  if, during the 5-year period ending on the date of the sale or 
  exchange, such property has been owned and used by the taxpayer as the 
  taxpayer's principal residence for periods aggregating 2 years or more.
      ``(b) Limitations.--
              ``(1) Aggregate limitation.--The aggregate amount allowed 
          as a deduction under subsection (a) for all taxable years shall 
          not exceed $6,000 ($12,000 in the case of a joint return).
              ``(2) Annual limitation.--
                      ``(A) In general.--The amount allowed to a taxpayer 
                  as a deduction under subsection (a) for a taxable year 
                  shall not exceed $2,000 ($4,000 in the case of a joint 
                  return).
                      ``(B) Carryforward.--If the deduction allowable 
                  under subsection (a) for any taxable year exceeds the 
                  limitation imposed by subparagraph (A) for the taxable 
                  year, the excess shall be carried to each of the 2 
                  succeeding taxable years and added to the deduction 
                  allowable under subsection (a) for such succeeding 
                  year.
              ``(3) Exclusion of loss allocated to nonqualified use.--
                      ``(A) In general.--Subsection (a) shall not apply 
                  to so much of the loss from the sale or exchange of 
                  property as is allocated to periods of nonqualified 
                  use.
                      ``(B) Allocation.--For purposes of subparagraph 
                  (A), loss shall be allocated to periods of nonqualified 
                  use based on the ratio which--
                              ``(i) the aggregate periods of nonqualified 
                          use during the period such property was owned 
                          by the taxpayer, bears to
                              ``(ii) the period such property was owned 
                          by the taxpayer.
                      ``(C) Period of nonqualified use; coordination with 
                  recognition of gain attributable to depreciation.--For 
                  purposes of this paragraph, rules similar to the rules 
                  of subparagraphs (C) and (D) of section 121(b)(5) shall 
                  apply.
              ``(4) Application to only 1 sale.--
                      ``(A) In general.--Subsection (a) shall not apply 
                  to more than 1 sale or exchange of a principal 
                  residence by the taxpayer.
                      ``(B) Special rule for joint returns.--In the case 
                  of a joint return with respect to the sale or exchange 
                  of a principal residence, if a deduction was allowable 
                  under subsection (a) to a spouse for a prior sale or 
                  exchange of a principal residence, paragraphs (1) and 
                  (2)(A) shall be applied by reducing the dollar amounts 
                  therein by the deduction so allowable (one-half of such 
                  deduction in the case of a joint return).
      ``(c) Applicable Rules.--For purposes of this section, rules 
  similar to the rules of subsection (d) of section 121 shall apply, 
  except that paragraph (6) thereof shall be applied by substituting 
  `loss' for `gain'.
      ``(d) Election To Have Section Not Apply.--This section shall not 
  apply to any sale or exchange with respect to which the taxpayer elects 
  not to have this section apply.
      ``(e) Termination.--The section shall not apply to the sale or 
  exchange of a principal residence after December 31, 2010.''.
      (b) Deduction Allowed in Computing Adjusted Gross Income.--
  Subsection (a) of section 62 of such Code is amended by inserting 
  before the last sentence the following new paragraph:
              ``(22) Loss from sale of principal residence.--The 
          deduction allowed by section 224.''.
      (c) Clerical Amendments.--The table of sections for part VII of 
  subchapter B of chapter 1 of such Code is amended by striking the item 
  relating to section 224 and inserting the following:
  
  ``Sec. 224. Loss from sale of principal residence.
  ``Sec. 225. Cross reference.''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2008.
target: Amends the Internal Revenue Code relating to the first-time homebuyer tax credit to: (1) extend such credit to all purchasers of a principal residence; (2) limit the credit to one sale or exchange of a principal residence; and (3) extend such credit through November 30, 2010.
  
  Allows individual taxpayers a tax deduction through 2010 for losses from the sale or exchange of a principal residence.
feat_title: To amend the Internal Revenue Code of 1986 to extend and expand the first-time homebuyers credit and to provide a loss deduction on the sale of a principal residence.