To amend the Internal Revenue Code of 1986 to provide tax relief and encourage economic recovery.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to provide for the treatment of rental and nonrental real estate activities under the limitations on losses from passive activities. Establishes a maximum capital gains rate of 17 percent on the sale or exchange of real property held for more than one year. Allows a tax credit for individuals for the purchase of a personal residence. Limits such credit to $2,000, if the individual is a first-time homebuyer, and $1,500, if the individual is not a first-time homebuyer but the residence is newly constructed. Allows an itemized deduction for losses incurred in the sale or exchange of a principal residence.…