[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4080 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 4080

      To amend the Internal Revenue Code of 1986 to provide bonus 
         depreciation for long-term residential rental housing.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 12, 2026

Ms. Blunt Rochester introduced the following bill; which was read twice 
                and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
      To amend the Internal Revenue Code of 1986 to provide bonus 
         depreciation for long-term residential rental housing.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rental Housing Investment Act''.

SEC. 2. TAX INCENTIVES FOR LONG-TERM RESIDENTIAL RENTAL HOUSING.

    (a) Special Depreciation Allowance.--
            (1) In general.--Section 168 of the Internal Revenue Code 
        of 1986, as amended by section 70307 of Public Law 119-21, is 
        amended by adding at the end the following new subsection:
    ``(o) Special Allowance for Long-Term Residential Rental 
Property.--
            ``(1) In general.--In the case of any long-term residential 
        rental property of a taxpayer making an election under this 
        subsection--
                    ``(A) the depreciation deduction provided by 
                section 167(a) for the taxable year in which such 
                property is placed in service shall include an 
                allowance equal to the lesser of--
                            ``(i) an amount equal to the product of--
                                    ``(I) the total number of dwelling 
                                units in the long-term residential 
                                rental property, multiplied by
                                    ``(II) $150,000, or
                            ``(ii) 100 percent of the adjusted basis of 
                        the long-term residential rental property 
                        (other than land), and
                    ``(B) the adjusted basis of the long-term 
                residential rental property shall be reduced by the 
                amount of such deduction before computing the amount 
                otherwise allowable as a depreciation deduction under 
                this chapter for such taxable year and any subsequent 
                taxable year.
            ``(2) Long-term residential rental property.--For purposes 
        of this subsection, the term `long-term residential rental 
        property' means property--
                    ``(A) to which this section applies,
                    ``(B) which is placed in service in the United 
                States after the date of enactment of this subsection,
                    ``(C) which--
                            ``(i) is used as residential rental 
                        property (as defined in subsection (e)(2)(A)), 
                        and
                            ``(ii) consists of not less than 2 dwelling 
                        units,
                    ``(D) the original use of which commences with the 
                taxpayer, and
                    ``(E) which is designated by the taxpayer in the 
                election made under this subsection.
            ``(3) Deduction allowed in computing minimum tax.--For 
        purposes of determining alternative minimum taxable income 
        under section 55, the deduction under section 167 for long-term 
        residential rental property shall be determined under this 
        section without regard to any adjustment under section 56.
            ``(4) Recapture.--If, at any time during the 10-year period 
        beginning on the date that any long-term residential rental 
        property is placed in service by the taxpayer, such property 
        ceases to be used as described in paragraph (2)(C)--
                    ``(A) section 1245 shall be applied--
                            ``(i) by treating such property as having 
                        been disposed of by the taxpayer as of the 
                        first time such property is so used, and
                            ``(ii) by treating the amount described in 
                        subparagraph (B) of section 1245(a)(1) with 
                        respect to such disposition as being not less 
                        than the amount described in subparagraph (A) 
                        of such section, and
                    ``(B) the basis of the taxpayer in such property, 
                and the taxpayer's allowance for depreciation with 
                respect to such property, shall be appropriately 
                adjusted to take into account amounts recognized by 
                reason of subparagraph (A).
            ``(5) Additional amount for affordable housing.--
                    ``(A) In general.--In the case of any long-term 
                residential rental property which is part of a project 
                which meets any of the requirements described in 
                subparagraph (A), (B), or (C) of section 42(g)(1), as 
                elected by the taxpayer, paragraph (1)(A)(i)(II) shall 
                be applied with respect to such property by 
                substituting `$250,000' for `$150,000'.
                    ``(B) Extended recapture period.--In the case of 
                any long-term residential rental property described in 
                subparagraph (A), if, at any time during the 15-year 
                period beginning on the date that such property is 
                placed in service by the taxpayer, such property ceases 
                to satisfy the requirements described in such 
                subparagraph, subparagraphs (A) and (B) of paragraph 
                (4) shall apply.
            ``(6) Election.--
                    ``(A) In general.--An election under this 
                subsection for any taxable year shall--
                            ``(i) specify the property subject to the 
                        election, and
                            ``(ii) except as otherwise provided by the 
                        Secretary, be made on the taxpayer's return of 
                        the tax imposed by this chapter for the taxable 
                        year.
                Such election shall be made in such manner as the 
                Secretary may prescribe by regulations or other 
                guidance.
                    ``(B) Election.--Any election made under this 
                subsection, and any specification contained in any such 
                election, may not be revoked except with the consent of 
                the Secretary (and the Secretary shall provide such 
                consent only in extraordinary circumstances).
            ``(7) Regulations.--The Secretary shall issue such 
        regulations or other guidance as may be necessary or 
        appropriate to carry out the purposes of this subsection, 
        including regulations or other guidance regarding--
                    ``(A) the application of paragraph (5) in a manner 
                which is consistent with the application of section 
                42(g), and
                    ``(B) certification of compliance with the 
                requirements under such paragraph.''.
            (2) Treatment of long-term residential rental property as 
        section 1245 property.--Section 1245(a)(3) of the Internal 
        Revenue Code of 1986 is amended by striking ``or'' at the end 
        of subparagraph (F), by striking the period at the end of 
        subparagraph (G) and inserting ``, or'', and by adding at the 
        end the following new subparagraph:
                    ``(H) any long-term residential rental property (as 
                defined in section 168(o)(2)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date which is 12 months 
after the date of the enactment of this Act.
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