Incentivizing Readiness and Environmental Protection Integration Sales Act of 2024

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139I the following new section:

Gross income shall not include any gain from the sale of qualified real property interest to a qualified organization for REPI purposes.

For purposes of this section—

The term qualified real property interest means any of the following interests in real property:

(i) The entire interest of the taxpayer.

(ii) A remainder interest.

(iii) A restriction (granted in perpetuity and created pursuant to State real property law) on the use which may be made of the real property.

An interest in real property shall not fail to be treated as a qualified real property interest solely by reason of a retention of a qualified mineral interest (as defined in section 170(h)(6)), but only if the right to access such mineral interest is not accomplished by any surface mining method.

The term qualified organization has the meaning given such term by section 170(h)(3).

A sale of qualified real property interest shall be treated as being for REPI purposes if such sale is pursuant to the authority of the Readiness and Environmental Protection Integration (REPI) program administered by the Department of Defense under section 2684a of title 10, United States Code.

In the case of a pass-through entity, no amount shall be excluded from gross income under subsection (a) with respect to a sale if such entity acquired the qualified real property interest by sale within 3 years of the date of the sale described in subsection (a).

Paragraph (1) shall not apply with respect to any sale made by any partnership if substantially all of the partnership interests in such partnership are held, directly or indirectly, by an individual and members of the family of such individual.

For purposes of this paragraph, the term members of the family means, with respect to any individual—

(i) the spouse of such individual, and

(ii) any individual who bears a relationship to such individual which is described in subparagraphs (A) through (G) of section 152(d)(2).

Except as may be otherwise provided by the Secretary, the rules of this paragraph shall apply to S corporations and other pass-through entities in the same manner as such rules apply to partnerships.

The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139I the following new item:

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.