QUALIFIED RESIDENTIAL INDEBTEDNESS HR3648

(A) IN GENERAL- The term `qualified residential indebtedness' means indebtedness which--
(i) was incurred or assumed by the taxpayer in connection with real property used as a residence and is secured by such real property,
(ii) is incurred or assumed to acquire, construct, reconstruct, or substantially improve such real property, and
(iii) with respect to which such taxpayer makes an election to have this paragraph apply.
(B) REFINANCED INDEBTEDNESS- Such term shall include indebtedness resulting from the refinancing of indebtedness under subparagraph (A)(ii), but only to the extent the refinanced indebtedness does not exceed the amount of the indebtedness being refinanced.
(C) EXCEPTIONS- Such term shall not include qualified farm indebtedness or qualified real property business indebtedness.

(c) Conforming Amendments-
(1) Paragraph (2) of section 108(a) of such Code is amended--

hr 3648

mortgage cancellation tax relief act of 2007