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House Bill 5617
116th Congress(2019-2020)
Taxi Medallion Loan Forgiveness Debt Relief Act of 2020
Introduced
Introduced
Introduced in House on Jan 15, 2020
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Introduced in House 
Jan 15, 2020
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Introduced in House(Jan 15, 2020)
Jan 15, 2020
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H. R. 5617 (Introduced-in-House)


116th CONGRESS
2d Session
H. R. 5617


To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on taxi medallions from gross income.

IN THE HOUSE OF REPRESENTATIVES

January 15, 2020

Mr. Meeks (for himself, Ms. Velázquez, Mr. Rose of New York, Mrs. Carolyn B. Maloney of New York, Ms. Meng, Mr. Suozzi, Mr. Engel, Ms. Clarke of New York, Mr. Espaillat, Mr. Nadler, Mr. Serrano, Mr. Jeffries, Mr. King of New York, Ms. Ocasio-Cortez, and Miss Rice of New York) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on taxi medallions from gross income.

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 “Taxi Medallion Loan Forgiveness Debt Relief Act of 2020”.

SEC. 2. Exclusion of discharges of qualified taxi medallion indebtedness.

(a) In general.—Section 108(a)(1) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting “, or”, and by inserting after subparagraph (E) the following new subparagraph:

“(F) in the case of a taxpayer other than a C corporation, the indebtedness discharged is qualified taxi medallion indebtedness which is discharged before January 1, 2023.”.

(b) Special rules relating to qualified taxi medallion indebtedness.—Section 108 of such Code is amended by adding at the end the following new subsection:

“(j) Special rules relating to qualified taxi medallion indebtedness.—

“(1) BASIS REDUCTION.—The amount excluded from gross income by reason of subsection (a)(1)(E) shall be applied to reduce (but not below zero) the basis of the taxi medallions of the taxpayer that secure the discharged indebtedness.

“(2) QUALIFIED TAXI MEDALLION INDEBTEDNESS.—For purposes of this section—

“(A) IN GENERAL.—The term ‘qualified taxi medallion indebtedness’ means indebtedness which—

“(i) is secured by a taxi medallion, and

“(ii) with respect to which such taxpayer makes an election to have this paragraph apply.

“(B) LIMITATION.—With respect to a taxpayer, the aggregate amount treated as qualified taxi medallion indebtedness for any period shall not exceed $2,000,000 ($1,000,000 in the case of a married individual filing a separate return).

“(C) EXCEPTION FOR CERTAIN DISCHARGES NOT RELATED TO TAXPAYER'S FINANCIAL CONDITION.—Subsection (a)(1)(F) shall not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the taxi medallion or to the financial condition of the taxpayer.

“(D) ORDERING RULE.—If any loan is discharged, in whole or in part, and only a portion of such loan is qualified taxi medallion indebtedness, subsection (a)(1)(F) shall apply only to so much of the amount discharged as exceeds the amount of the loan (as determined immediately before such discharge) which is not qualified taxi medallion indebtedness.”.

(c) Conforming amendments.—

(1) Section 108(a)(2) of such Code is amended by adding at the end the following new subparagraph:

“(D) TAXI MEDALLION EXCLUSION TAKES PRECEDENCE OVER INSOLVENCY EXCLUSION UNLESS ELECTED OTHERWISE.—Paragraph (1)(B) shall not apply to a discharge to which paragraph (1)(F) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(F).”.

(d) Effective date.—The amendments made by this section shall apply to discharges of indebtedness after December 31, 2016.