[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 784 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 784

 To amend the Internal Revenue Code of 1986 to increase the limitation 
on capital losses an individual may deduct against ordinary income, and 
  to allow individuals a 3-year capital loss carryback and unlimited 
                              carryovers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 26, 2001

 Mr. Murkowski 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 increase the limitation 
on capital losses an individual may deduct against ordinary income, and 
  to allow individuals a 3-year capital loss carryback and unlimited 
                              carryovers.

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

SECTION 1. TREATMENT OF CAPITAL LOSSES OF TAXPAYERS OTHER THAN 
              CORPORATIONS.

    (a) Increase in Limitation on Losses Allowable Against Ordinary 
Income.--Section 1211(b)(1) of the Internal Revenue Code of 1986 
(relating to limitation on capital losses of taxpayers other than 
corporations) is amended--
            (1) by striking ``$3,000'' and inserting ``$20,000'', and
            (2) by striking ``$1,500'' and inserting ``$10,000''.
    (b) Carryback and Carryovers of Capital Losses.--Section 1212(b)(1) 
of the Internal Revenue Code of 1986 (relating to capital loss 
carrybacks and carryovers of taxpayers other than corporations) is 
amended to read as follows:
            ``(1) Carrybacks and carryovers.--
                    ``(A) In general.--If a taxpayer other than a 
                corporation has a net capital loss for any taxable year 
                (the `loss year')--
                            ``(i) the excess of the net short-term 
                        capital loss over the net long-term capital 
                        gain for the loss year shall be a capital loss 
                        carryback to each of the 3 taxable years 
                        preceding the loss year and a capital loss 
                        carryover to each taxable year succeeding the 
                        loss year, and shall be treated as a short-term 
                        capital loss in each such taxable year, and
                            ``(ii) the excess of the net long-term 
                        capital loss over the net short-term capital 
                        gain for the loss year shall be a capital loss 
                        carryback to each of the 3 taxable years 
                        preceding the loss year and a capital loss 
                        carryover to each taxable year succeeding the 
                        loss year, and shall be treated as a long-term 
                        capital loss in each of such taxable years.
                    ``(B) Amount carried to each taxable year.--The 
                entire amount of the loss which may be carried to 
                another taxable year under subparagraph (A) shall be 
                carried to the earliest of the taxable years to which 
                the loss may be carried. The portion of such loss which 
                may be carried to any other taxable year shall be the 
                excess (if any) of such loss over the portion of such 
                loss which, after application of subparagraph (C), was 
                allowed as a carryback or carryover to any prior 
                taxable year.
                    ``(C) Amount which may be used.--An amount shall be 
                allowed as a carryback or carryover from a loss year to 
                another taxable year only to the extent--
                            ``(i) such amount does not exceed the 
                        excess (if any) of--
                                    ``(I) the sum of the losses from 
                                the sale or exchange of capital assets 
                                in such other taxable year plus losses 
                                carried under this paragraph to such 
                                other taxable year from taxable years 
                                prior to such loss year, over
                                    ``(II) gains from such sales or 
                                exchanges in such other taxable year, 
                                and
                            ``(ii) the allowance of such carryback or 
                        carryover does not increase or produce a net 
                        operating loss (as defined in section 172(c)) 
                        for such other taxable year.''
    (c) Conforming Amendments.--
            (1) Section 1212(b)(2)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``subparagraph (A) or (B) of 
        paragraph (1)'' and inserting ``clause (i) or (ii) of paragraph 
        (1)(A)''.
            (2) Section 1212 of such Code is amended by striking 
        subsection (c).
    (d) Effective Date.--The amendments made by this section shall 
apply to capital losses arising in taxable years beginning after 
December 31, 2000.
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