[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 300 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 300

  To amend the Internal Revenue Code of 1986 to allow individuals an 
   exclusion from gross income for certain amounts of capital gains 
           distributions from regulated investment companies.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 30, 2001

  Mr. Saxton 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 allow individuals an 
   exclusion from gross income for certain amounts of capital gains 
           distributions from regulated investment companies.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. PARTIAL EXCLUSION OF CAPITAL GAINS DISTRIBUTIONS FROM 
              REGULATED INVESTMENT COMPANIES.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 115 the 
following new section:

``SEC. 116. PARTIAL EXCLUSION OF CAPITAL GAINS DISTRIBUTIONS FROM 
              REGULATED INVESTMENT COMPANIES.

    ``(a) In General.--In the case of an individual, gross income shall 
not include any capital gain dividend--
            ``(1) which is distributed by a regulated investment 
        company to which part I of subchapter M applies, and
            ``(2) which is automatically reinvested by the company in 
        the stock of such company with respect to which the dividend is 
        distributed.
    ``(b) Maximum Exclusion.--The amount excluded from gross income 
under subsection (a) for the taxable year shall not exceed--
            ``(1) $5,000, or
            ``(2) in the case of a joint return, twice the amount 
        applicable under paragraph (1).
    ``(c) Capital Gain Dividend.--For purposes of this section, the 
term `capital gain dividend' means--
            ``(1) any capital gain dividend (as defined by section 
        852(b)(3)(C)), and
            ``(2) the portion of any other dividend designated by the 
        company (under rules similar to the rules of such section) as 
        representing such dividend's proportionate share of the net 
        short-term capital gain of the company.
    ``(d) Inflation Adjustment of Maximum Exclusion.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2000, the $5,000 amount in 
        subsection (b)(1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 1999' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding rules.--If any amount after adjustment under 
        paragraph (1) is not a multiple of $100, such amount shall be 
        rounded to the nearest multiple of $100.
    ``(e) No Basis Adjustment.--No adjustment shall be made to the 
taxpayer's basis in the shares of the regulated investment company by 
reason of any amount excluded from gross income under this section.''
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 115 the following new item:

                              ``Sec. 116. Partial exclusion of capital 
                                        gains distributions from 
                                        regulated investment 
                                        companies.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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