[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 302 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 302
To amend the Internal Revenue Code of 1986 to reduce the maximum
capital gain tax rate for gains from property held for more than 5 or
10 years.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 13, 2001
Mr. Shelby introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reduce the maximum
capital gain tax rate for gains from property held for more than 5 or
10 years.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. REDUCTION IN MAXIMUM CAPITAL GAIN RATES FOR 5-YEAR AND 10-
YEAR GAINS.
(a) In General.--Paragraph (2) of section 1(h) of the Internal
Revenue Code of 1986 (relating to maximum capital gains rate) is
amended to read as follows:
``(2) Reduced capital gain rates for qualified 5-year and
10-year gain.--
``(A) Reduction in 10-percent rate.--In the case of
any taxable year beginning after December 31, 2001, the
rate under paragraph (1)(B) shall be--
``(i) 8 percent with respect to so much of
the amount to which the 10-percent rate would
otherwise apply as does not exceed qualified 5-
year gain,
``(ii) 5 percent with respect to so much of
the amount to which the 10-percent rate would
otherwise apply as does not exceed qualified
10-year gain, and
``(iii) 10 percent with respect to the
remainder of such amount.
``(B) Reduction in 20-percent rate.--The rate under
paragraph (1)(C) shall be--
``(i) 10 percent with respect to so much of
the amount to which the 20-percent rate would
otherwise apply as does not exceed the lesser
of--
``(I) the excess of qualified 5-
year gain over the amount of such gain
taken into account under subparagraph
(A) of this paragraph, or
``(II) the amount of qualified 5-
year gain (determined by taking into
account only property the holding
period for which begins after December
31, 2001),
``(ii) 5 percent with respect to so much of
the amount to which the 20-percent rate would
otherwise apply as does not exceed the lesser
of--
``(I) the excess of qualified 10-
year gain over the amount of such gain
taken into account under subparagraph
(A) of this paragraph, or
``(II) the amount of qualified 10-
year gain (determined by taking into
account only property the holding
period for which begins after December
31, 2001), and
``(iii) 20 percent with respect to the
remainder of such amount.
For purposes of determining under the preceding
sentence whether the holding period of property begins
after December 31, 2001, the holding period of property
acquired pursuant to the exercise of an option (or
other right or obligation to acquire property) shall
include the period such option (or other right or
obligation) was held.''.
(b) Qualified 5-year and 10-year Gain.--Paragraph (9) of section
1(h) of the Internal Revenue Code of 1986 is amended to read as
follows:
``(9) Qualified 5-year and 10-year gain.--For purposes of
this subsection--
``(A) Qualified 5-year gain.--The term `qualified
5-year gain' means the aggregate long-term capital gain
from property held for more than 5 years but not more
than 10 years.
``(B) Qualified 10-year gain.--The term `qualified
10-year gain' means the aggregate long-term capital
gain from property held for more than 10 years.
``(C) Determination of gain.--The determination
under subparagraph (A) or (B) shall be made without
regard to collectibles gain, gain described in
paragraph (7)(A)(i), and section 1202 gain.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
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