Amend the Internal Revenue Code of 1986 to impose an excise tax on the failure of certain hedge funds owning excess single-family residences to dispose of such residences, and for other purposes.

Summary

Creates a new tax regime that targets owners of excess single-family homes by imposing an excise tax on certain taxpayers who fail to sell those properties and by denying two tax benefits for those same owners. Specifically, it disallows (1) a deduction for interest on acquisition indebtedness and (2) depreciation deductions for single-family residences owned by a "covered taxpayer." The changes apply to taxable years beginning after enactment and rely on existing definitions for "single-family residence," ownership rules, and acquisition indebtedness in the Internal Revenue Code.

• Creates a new excise tax on certain taxpayers who fail to sell excess single-family residences.
• Disallows the interest deduction for acquisition indebtedness on single-family residences owned by "covered taxpayers."
• Disallows depreciation deductions for single-family residences owned by "covered taxpayers."
• Relies on cross-references to existing definitions in 26 U.S.C. 5000G(b) and (c) and 163(h)(3)(B) for key terms.
• All tax changes apply to taxable years beginning after enactment.
• Aims to discourage long-term holding of excess single-family homes by targeted owners and incentivize sales into the owner-occupant market.
• Raises potential IRS administrative and compliance workload to implement and enforce the new excise tax and denial provisions.
• Scope and impact depend heavily on the precise definitions of "covered taxpayer" and "excess single-family residence," which appear in the new chapter text not included here.