text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Mortgage Insurance Fairness Act''.
  
  SEC. 2. PREMIUMS FOR MORTGAGE INSURANCE.
  
      (a) In General.--Paragraph (3) of section 163(h) of the Internal 
  Revenue Code of 1986 (relating to qualified residence interest) is 
  amended by adding after subparagraph (D) the following new 
  subparagraph:
                      ``(E) Mortgage insurance premiums treated as 
                  interest.--
                              ``(i) In general.--Premiums paid or accrued 
                          for qualified mortgage insurance by a taxpayer 
                          during the taxable year in connection with 
                          acquisition indebtedness with respect to a 
                          qualified residence of the taxpayer shall be 
                          treated for purposes of this subsection as 
                          qualified residence interest.
                              ``(ii) Phaseout.--The amount otherwise 
                          allowable as a deduction under clause (i) shall 
                          be reduced (but not below zero) by 10 percent 
                          of such amount for each $1,000 ($500 in the 
                          case of a married individual filing a separate 
                          return) (or fraction thereof) that the 
                          taxpayer's adjusted gross income for the 
                          taxable year exceeds $100,000 ($50,000 in the 
                          case of a married individual filing a separate 
                          return).''.
      (b) Definition and Special Rules.--Paragraph (4) of section 163(h) 
  of the Internal Revenue Code of 1986 (relating to other definitions and 
  special rules) is amended by adding at the end the following new 
  subparagraphs:
                      ``(E) Qualified mortgage insurance.--The term 
                  `qualified mortgage insurance' means--
                              ``(i) mortgage insurance provided by the 
                          Veterans Administration, the Federal Housing 
                          Administration, or the Rural Housing 
                          Administration, and
                              ``(ii) private mortgage insurance (as 
                          defined by section 2 of the Homeowners 
                          Protection Act of 1998 (12 U.S.C. 4901), as in 
                          effect on the date of the enactment of this 
                          subparagraph).
                      ``(F) Special rules for prepaid qualified mortgage 
                  insurance.--Any amount paid by the taxpayer for 
                  qualified mortgage insurance that is properly allocable 
                  to any mortgage the payment of which extends to periods 
                  that are after the close of the taxable year in which 
                  such amount is paid shall be chargeable to capital 
                  account and shall be treated as paid in such periods to 
                  which so allocated. No deduction shall be allowed for 
                  the unamortized balance of such account if such 
                  mortgage is satisfied before the end of its term. The 
                  preceding sentences shall not apply to amounts paid for 
                  qualified mortgage insurance provided by the Veterans 
                  Administration or the Rural Housing Administration.''.
  
  SEC. 3. INFORMATION RETURNS RELATING TO MORTGAGE INSURANCE.
  
      Section 6050H of the Internal Revenue Code of 1986 (relating to 
  returns relating to mortgage interest received in trade or business 
  from individuals) is amended by adding at the end the following new 
  subsection:
      ``(h) Returns Relating to Mortgage Insurance Premiums.--
              ``(1) In general.--The Secretary may prescribe, by 
          regulations, that any person who, in the course of a trade or 
          business, receives from any individual premiums for mortgage 
          insurance aggregating $600 or more for any calendar year, shall 
          make a return with respect to each such individual. Such return 
          shall be in such form, shall be made at such time, and shall 
          contain such information as the Secretary may prescribe.
              ``(2) Statement to be furnished to individuals with respect 
          to whom information is required.--Every person required to make 
          a return under paragraph (1) shall furnish to each individual 
          with respect to whom a return is made a written statement 
          showing such information as the Secretary may prescribe. Such 
          written statement shall be furnished on or before January 31 of 
          the year following the calendar year for which the return under 
          paragraph (1) was required to be made.
              ``(3) Special rules.--For purposes of this subsection--
                      ``(A) rules similar to the rules of subsection (c) 
                  shall apply, and
                      ``(B) the term `mortgage insurance' means--
                              ``(i) mortgage insurance provided by the 
                          Veterans Administration, the Federal Housing 
                          Administration, or the Rural Housing 
                          Administration, and
                              ``(ii) private mortgage insurance (as 
                          defined by section 2 of the Homeowners 
                          Protection Act of 1998 (12 U.S.C. 4901), as in 
                          effect on the date of the enactment of this 
                          subsection).''.
  
  SEC. 4. EFFECTIVE DATE.
  
      The amendments made by this Act shall apply to amounts paid or 
  accrued after the date of enactment of this Act in taxable years ending 
  after such date.
target: Mortgage Insurance Fairness Act - Amends the Internal Revenue Code to treat mortgage insurance premium payments as tax deductible interest. Phases out the deduction for taxpayers with adjusted gross incomes exceeding $100,000.
feat_title: A bill to amend the Internal Revenue Code of 1986 to allow a deduction for premiums on mortgage insurance.