[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 396 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 396

To amend the Internal Revenue Code of 1986 to provide that certain net 
   capital gain of individuals who have attained age 65 shall not be 
                            subject to tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 9, 2009

 Mr. Cohen (for himself, Mr. Wexler, and Mr. Gallegly) 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 provide that certain net 
   capital gain of individuals who have attained age 65 shall not be 
                            subject to tax.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Senior Assets Verification Exemption 
(SAVE) from Capital Gains Tax Act of 2009''.

SEC. 2. DEDUCTION FOR NET CAPITAL GAIN ON LONG-HELD ASSETS OF 
              INDIVIDUALS WHO HAVE ATTAINED AGE 65.

    (a) In General.--Part I of subchapter P of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 1203. DEDUCTION FOR NET CAPITAL GAIN ON LONG-HELD ASSETS OF 
              INDIVIDUALS WHO HAVE ATTAINED AGE 65.

    ``(a) In General.--In the case of an eligible taxpayer, there shall 
be allowed a deduction against gross income the amount equal to the 
taxpayer's qualified net capital gain for the taxable year.
    ``(b) Eligible Taxpayer.--For purposes of this section--
            ``(1) In general.--The term `eligible taxpayer' means any 
        individual who has attained age 65 before the close of the 
        taxable year.
            ``(2) Joint returns.--In the case of a taxpayer filing a 
        joint return, such taxpayer shall be treated as an eligible 
        individual if either spouse has attained age 65 before the 
        close of the taxable year.
    ``(c) Qualified Net Capital Gain.--For purposes of this section, 
the term `qualified net capital gain' means the lesser of--
            ``(1) net capital gain, or
            ``(2) net capital gain determined by taking into account 
        only assets held for at least 15 years.''.
    (b) Coordination With Maximum Capital Gains Rates.--Paragraph (2) 
of section 1(h) of such Code is amended to read as follows:
            ``(2) Reduction of net capital gain.--For purposes of this 
        subsection, the net capital gain for any taxable year shall be 
        reduced (but not below zero) by the sum of--
                    ``(A) the amount which the taxpayer takes into 
                account as investment income under section 
                163(d)(4)(B)(iii), and
                    ``(B) the deduction allowed by section 1203.''.
    (c) Deduction Allowable in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code (defining adjusted gross 
income) is amended by inserting after paragraph (21) the following new 
paragraph:
            ``(22) Certain net capital gain of individuals attaining 
        age 65.--The deduction allowed by section 1203.''.
    (d) Conforming Amendments.--
            (1) Subparagraph (E) of section 163(d)(4) of such Code is 
        amended to read as follows:
                    ``(E) Coordination with capital gains deduction.--
                The net capital gain taken into account under section 
                1202 for any taxable year shall be reduced (but not 
                below zero) by the amount which the taxpayer takes into 
                account as investment income under subparagraph 
                (B)(iii) for such year.''.
            (2) Subparagraph (B) of section 172(d)(2) of such Code is 
        amended to read as follows:
                    ``(B) the exclusion under section 1202, and the 
                deduction under section 1203, shall not be allowed.''.
            (3) Paragraph (4) of section 691(c) of such Code is amended 
        by inserting ``1203,'' after ``1202,''.
            (4) Paragraph (2) of section 871(a) of such Code is amended 
        by inserting ``or 1203,'' after ``1202,''.
            (5) Paragraph (1) of section 1402(i) of such Code is 
        amended by inserting ``, and the deduction provided by section 
        1203 shall not apply'' before the period at the end thereof.
            (6) The table of sections for part I of subchapter P of 
        chapter 1 of such Code is amended by adding at the end the 
        following new item:

``Sec. 1203. Deduction for net capital gain on long-held assets of 
                            individuals who have attained age 65.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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