text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Keep Our Homes Act of 2008''.
  
  SEC. 2. TEMPORARY DEDUCTION FOR CERTAIN MORTGAGE COUNSELING.
  
      (a) In General.--Part VII of subchapter B of chapter 1 of the 
  Internal Revenue Code of 1986 (relating to additional itemized 
  deductions) is amended by redesignating section 224 as section 225 and 
  by inserting after section 223 the following new section:
  
  ``SEC. 224. CERTAIN MORTGAGE COUNSELING.
  
      ``(a) In General.--In the case of an individual, there shall be 
  allowed as a deduction an amount equal to the amount paid or incurred 
  by the taxpayer during the taxable year for qualified mortgage 
  counseling.
      ``(b) Limitation.--The deduction allowed under subsection (a) shall 
  not exceed $500 for any taxable year.
      ``(c) Qualified Mortgage Counseling.--For purposes of this section, 
  the term `qualified mortgage counseling' means any mortgage counseling 
  provided by an organization accredited by the Federal Housing 
  Administration to provide such counseling if such counseling is 
  obtained before the issuance of the loan with respect to which such 
  counseling relates. Such term shall not include any counseling if such 
  counseling is provided with respect to a loan which is not secured by 
  the principal residence (within the meaning of section 121) of the 
  taxpayer.
      ``(d) Termination.--The deduction under this section shall not be 
  allowed with respect to any amount paid or incurred after December 31, 
  2012.''.
      (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:
              ``(21) Certain mortgage counseling.--The deduction allowed 
          by section 224.''.
      (c) Clerical Amendment.--The table of sections for part VII of 
  subchapter B of chapter 1 of such Code is amended by redesignating the 
  item relating to section 224 as an item relating to section 225 and 
  inserting before such item the following new item:
  
  ``Sec. 224. Certain mortgage counseling.''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2007.
  
  SEC. 3. TEMPORARY DEDUCTION FOR UPSIDE DOWN MORTGAGES.
  
      (a) In General.--Part VII of subchapter B of chapter 1 of the 
  Internal Revenue Code of 1986 (relating to additional itemized 
  deductions), as amended by this Act, is amended by redesignating 
  section 225 as section 226 and by inserting after section 224 the 
  following new section:
  
  ``SEC. 225. UPSIDE DOWN MORTGAGES.
  
      ``(a) In General.--In the case of an individual, there shall be 
  allowed as a deduction an amount equal to 20 percent of the excess (if 
  any) of--
              ``(1) the acquisition indebtedness (within the meaning of 
          section 163) as determined at the close of the taxable year 
          with respect to the principal residence (within the meaning of 
          section 121) of the taxpayer, over
              ``(2) the valuation (as in effect at the close of such 
          taxable year) of such residence as determined for purposes of 
          State and local real property tax assessments.
      ``(b) Limitation.--The deduction allowed under subsection (a) shall 
  not exceed $5,000 for any taxable year.
      ``(c) Denial of Benefit for Fraudulently Obtained Mortgages.--
  Acquisition indebtedness shall not be taken into account under 
  subsection (a) if material misstatements were made by the taxpayer in 
  obtaining such indebtedness.
      ``(d) Termination.--The deduction under this section shall not be 
  allowed with respect to any amount paid or incurred after December 31, 
  2009.''.
      (b) Deduction Allowed in Computing Adjusted Gross Income.--
  Subsection (a) of section 62 of such Code, as amended by this Act, is 
  amended by inserting before the last sentence the following new 
  paragraph:
              ``(22) Upside down mortgages.--The deduction allowed by 
          section 224.''.
      (c) Clerical Amendment.--The table of sections for part VII of 
  subchapter B of chapter 1 of such Code, as amended by this Act, is 
  amended by redesignating the item relating to section 225 as an item 
  relating to section 226 and inserting before such item the following 
  new item:
  
  ``Sec. 225. Upside down mortgages.''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2007.
  
  SEC. 4. TEMPORARY CREDIT FOR CERTAIN HOME PURCHASES.
  
      (a) Allowance of Credit.--Subpart A of part IV of subchapter A of 
  chapter 1 of the Internal Revenue Code of 1986 (relating to 
  nonrefundable personal credits) is amended by inserting after section 
  25D the following new section:
  
  ``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.
  
      ``(a) Allowance of Credit.--
              ``(1) In general.--In the case of an individual who is a 
          purchaser of a qualified principal residence during the taxable 
          year, there shall be allowed as a credit against the tax 
          imposed by this chapter an amount equal to the lesser of--
                      ``(A) 10 percent of the purchase price of the 
                  residence, or
                      ``(B) $7,500 ($9,000 if such residence is in a high 
                  cost area (as determined by the Secretary of Housing 
                  and Urban Development)).
              ``(2) Allocation of credit amount.--The amount of the 
          credit allowed under paragraph (1) shall be equally divided 
          among the 2 taxable years beginning with the taxable year in 
          which the purchase of the qualified principal residence is 
          made.
      ``(b) Limitations.--
              ``(1) Date of purchase.--The credit allowed under 
          subsection (a) shall be allowed only with respect to purchases 
          made--
                      ``(A) after the date of the enactment of this 
                  section, and
                      ``(B) before the date that is 12 months after such 
                  date.
              ``(2) Limitation based on modified adjusted gross income.--
                      ``(A) In general.--The amount allowable as a credit 
                  under subsection (a) (determined without regard to this 
                  paragraph) for the taxable year shall be reduced (but 
                  not below zero) by the amount which bears the same 
                  ratio to the amount which is so allowable as--
                              ``(i) the excess (if any) of--
                                      ``(I) the taxpayer's modified 
                                  adjusted gross income for such taxable 
                                  year, over
                                      ``(II) $70,000 ($140,000 in the 
                                  case of a joint return), bears to
                              ``(ii) $20,000.
                      ``(B) Modified adjusted gross income.--For purposes 
                  of subparagraph (A), 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.
              ``(3) Limitation based on amount of tax.--In the case of a 
          taxable year to which section 26(a)(2) does not apply, the 
          credit allowed under subsection (a) for any taxable year shall 
          not exceed the excess of--
                      ``(A) the sum of the regular tax liability (as 
                  defined in section 26(b)) plus the tax imposed by 
                  section 55, over
                      ``(B) the sum of the credits allowable under this 
                  subpart (other than this section and section 23) for 
                  the taxable year.
              ``(4) One-time only.--
                      ``(A) In general.--If a credit is allowed under 
                  this section in the case of any individual (and such 
                  individual's spouse, if married) with respect to the 
                  purchase of any qualified principal residence, no 
                  credit shall be allowed under this section in any 
                  taxable year with respect to the purchase of any other 
                  qualified principal residence by such individual or a 
                  spouse of such individual.
                      ``(B) Joint purchase.--In the case of a purchase of 
                  a qualified principal residence by 2 or more unmarried 
                  individuals or by 2 married individuals filing 
                  separately, no credit shall be allowed under this 
                  section if a credit under this section has been allowed 
                  to any of such individuals in any taxable year with 
                  respect to the purchase of any other qualified 
                  principal residence.
      ``(c) Qualified Principal Residence.--For purposes of this 
  section--
              ``(1) In general.--The term `qualified principal residence' 
          means any residence that is purchased to be the principal 
          residence of the purchaser.
              ``(2) Principal residence.--The term `principal residence' 
          has the same meaning as when used in section 121.
      ``(d) Denial of Double Benefit.--No credit shall be allowed under 
  this section for any purchase for which a credit is allowed under 
  section 1400C.
      ``(e) Recapture in the Case of Certain Dispositions.--In the event 
  that a taxpayer--
              ``(1) disposes of the qualified principal residence with 
          respect to which a credit is allowed under subsection (a), or
              ``(2) fails to occupy such residence as the taxpayer's 
          principal residence,
  at any time within 24 months after the date on which the taxpayer 
  purchased such residence, then the remaining portion of the credit 
  allowed under subsection (a) shall be disallowed in the taxable year 
  during which such disposition occurred or in which the taxpayer failed 
  to occupy the residence as a principal residence, and in any subsequent 
  taxable year in which the remaining portion of the credit would, but 
  for this subsection, have been allowed.
      ``(f) Special Rules.--
              ``(1) Joint purchase.--
                      ``(A) Married individuals filing separately.--In 
                  the case of 2 married individuals filing separately, 
                  subsection (a) shall be applied to each such individual 
                  by substituting `$3,500' for `$7,000' in paragraph (1) 
                  thereof.
                      ``(B) Unmarried individuals.--If 2 or more 
                  individuals who are not married purchase a qualified 
                  principal residence, the amount of the credit allowed 
                  under subsection (a) shall be allocated among such 
                  individuals in such manner as the Secretary may 
                  prescribe, except that the total amount of the credits 
                  allowed to all such individuals shall not exceed 
                  $7,000.
              ``(2) Purchase; purchase price.--Rules similar to the rules 
          of paragraphs (2) and (3) of section 1400C(e) (as in effect on 
          the date of the enactment of this section) shall apply for 
          purposes of this section.
              ``(3) Reporting requirement.--Rules similar to the rules of 
          section 1400C(f) (as so in effect) shall apply for purposes of 
          this section.
      ``(g) Basis Adjustment.--For purposes of this subtitle, if a credit 
  is allowed under this section with respect to the purchase of any 
  residence, the basis of such residence shall be reduced by the amount 
  of the credit so allowed.''.
      (b) Conforming Amendments.--
              (1) Section 24(b)(3)(B) of the Internal Revenue Code of 
          1986 is amended by striking ``and 25B'' and inserting ``, 25B, 
          and 25E''.
              (2) Section 25(e)(1)(C)(ii) of such Code is amended by 
          inserting ``25E,'' after ``25D,''.
              (3) Section 25B(g)(2) of such Code is amended by striking 
          ``section 23'' and inserting ``sections 23 and 25E''.
              (4) Section 25D(c)(2) of such Code is amended by striking 
          ``and 25B'' and inserting ``25B, and 25E''.
              (5) Section 26(a)(1) of such Code is amended by striking 
          ``and 25B'' and inserting ``25B, and 25E''.
              (6) Section 904(i) of such Code is amended by striking 
          ``and 25B'' and inserting ``25B, and 25E''.
              (7) Subsection (a) of section 1016 of such Code is amended 
          by striking ``and'' at the end of paragraph (36), by striking 
          the period at the end of paragraph (37) and inserting ``, 
          and'', and by adding at the end the following new paragraph:
              ``(38) to the extent provided in section 25E(g).''.
              (8) Section 1400C(d)(2) of such Code is amended by striking 
          ``and 25D'' and inserting ``25D, and 25E''.
      (c) Clerical Amendment.--The table of sections for subpart A of 
  part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
  1986 is amended by inserting after the item relating to section 25D the 
  following new item:
  
  ``Sec. 25E. Credit for certain home purchases.''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to purchases in taxable years ending after the date of the 
  enactment of this Act.
      (e) Application of EGTRRA Sunset.--The amendment made by subsection 
  (b)(1) shall be subject to title IX of the Economic Growth and Tax 
  Relief Reconciliation Act of 2001 in the same manner as the provisions 
  of such Act to which such amendment relates.
  
  SEC. 5. TEMPORARY ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES 
                FOR NONITEMIZERS.
  
      (a) In General.--Section 63(c)(1) of the Internal Revenue Code of 
  1986 (defining standard deduction) is amended by striking ``and'' at 
  the end of subparagraph (A), by striking the period at the end of 
  subparagraph (B) and inserting ``, and'', and by adding at the end the 
  following new subparagraph:
                      ``(C) in the case of any taxable year beginning in 
                  2008 or 2009, the real property tax deduction.''.
      (b) Definition.--Section 63(c) of the Internal Revenue Code of 1986 
  is amended by adding at the end the following new paragraph:
              ``(8) Real property tax deduction.--
                      ``(A) In general.--For purposes of paragraph (1), 
                  the real property tax deduction is so much of the 
                  amount of the eligible State and local real property 
                  taxes paid or accrued by the taxpayer during the 
                  taxable year which do not exceed $500 ($1,000 in the 
                  case of a joint return).
                      ``(B) Eligible state and local real property 
                  taxes.--For purposes of subparagraph (A), the term 
                  `eligible State and local real property taxes' means 
                  State and local real property taxes (within the meaning 
                  of section 164), but only if the rate of tax for all 
                  residential real property taxes in the jurisdiction has 
                  not been increased at any time after April 2, 2008, and 
                  before January 1, 2009.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2007.
  
  SEC. 6. TEMPORARY EXCLUSION OF UNEMPLOYMENT COMPENSATION FROM GROSS 
                INCOME.
  
      (a) In General.--Section 85 of the Internal Revenue Code of 1986 is 
  amended by adding at the end the following new subsection:
      ``(c) Temporary Exclusion.--Notwithstanding subsection (a), in the 
  case of unemployment compensation received by an individual during 2008 
  or 2009, gross income shall not include such compensation.''.
      (b) Effective Date.--The amendments made by this section shall 
  apply to amounts received after December 31, 2007.
target: Keep Our Homes Act of 2008 - Amends the Internal Revenue Code to allow: (1) a tax deduction through 2012 for mortgage counseling costs; (2) a tax deduction through 2009 for amounts, up to $5,000, of mortgage indebtedness in excess of the assessed value of a principal residence; (3) a one-time tax credit for a percentage of the purchase price of a principal residence; (4) nonitemizing taxpayers a tax deduction in 2008 or 2009 for real property taxes; and (5) an exclusion from gross income for unemployment compensation received in 2008 or 2009.
feat_title: To amend the Internal Revenue Code of 1986 to provide temporary housing related tax relief for individuals, and for other purposes.