[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1082 Introduced in Senate (IS)]
111th CONGRESS
1st Session
S. 1082
To amend the Internal Revenue Code of 1986 to allow individuals to
defer recognition of reinvested capital gains distributions from
regulated investment companies.
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IN THE SENATE OF THE UNITED STATES
May 20, 2009
Mr. Crapo (for himself and Mr. Johnson) 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 allow individuals to
defer recognition of reinvested 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. SHORT TITLE.
This Act may be cited as the ``Generate Retirement Ownership
Through Long-Term Holding Act of 2009''.
SEC. 2. DEFERRAL OF REINVESTED CAPITAL GAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.
(a) In General.--Part III of subchapter O of chapter 1 of the
Internal Revenue Code of 1986 (relating to common nontaxable exchanges)
is amended by inserting after section 1045 the following new section:
``SEC. 1046. REINVESTED CAPITAL GAIN DIVIDENDS OF REGULATED INVESTMENT
COMPANIES.
``(a) Nonrecognition of Gain.--In the case of an individual, no
gain shall be recognized on the receipt of a capital gain dividend
distributed by a regulated investment company to which part I of
subchapter M applies if such capital gain dividend is automatically
reinvested in additional shares of the company pursuant to a dividend
reinvestment plan.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Capital gain dividend.--The term `capital gain
dividend' has the meaning given to such term by section
852(b)(3)(C).
``(2) Recognition of deferred capital gain dividends.--
``(A) In general.--Gain treated as unrecognized in
accordance with subsection (a) shall be recognized in
accordance with subparagraph (B)--
``(i) upon a subsequent sale or redemption
by such individual of stock in the distributing
company, or
``(ii) upon the death of the individual.
``(B) Gain recognition.--
``(i) In general.--Upon a sale or
redemption described in subparagraph (A), the
taxpayer shall recognize that portion of total
gain treated as unrecognized in accordance with
subsection (a) (and not previously recognized
pursuant to this subparagraph) that is
equivalent to the portion of the taxpayer's
total shares in the distributing company that
are sold or redeemed.
``(ii) Death of individual.--Except as
provided by regulations, any portion of such
total gain not recognized under clause (i)
prior to the taxpayer's death shall be
recognized upon the death of the taxpayer and
included in the taxpayer's gross income for the
taxable year ending on the date of the
taxpayer's death.
``(3) Holding period.--
``(A) General rule.--The taxpayer's holding period
in shares acquired through reinvestment of a capital
gain dividend to which subsection (a) applies shall be
determined by treating the shareholder as having held
such shares for one year and a day as of the date such
shares are acquired.
``(B) Special rule for distributions of qualified
5-year gains.--In the case of a distribution of a
capital gain dividend (or portion thereof) in a taxable
year beginning after December 31, 2010, and properly
treated as qualified 5-year gain (within the meaning of
section 1(h), as in effect after such date),
subparagraph (A) shall apply by substituting `5 years
and a day' for `one year and a day'.
``(c) Section Not To Apply to Certain Taxpayers.--This section
shall not apply to--
``(1) an individual with respect to whom a deduction under
section 151 is allowable to another taxpayer for a taxable year
beginning in the calendar year in which such individual's
taxable year begins, or
``(2) an estate or trust.
``(d) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section.''.
(b) Conforming Amendments.--
(1) Section 852(b)(3)(B) of such Code is amended by adding
at the end the following new sentence: ``For rules regarding
nonrecognition of gain with respect to reinvested capital gain
dividends received by individuals, see section 1046.''.
(2) The table of sections for part III of subchapter O of
chapter 1 of such Code is amended by inserting after the item
relating to section 1045 the following new item:
``Sec. 1046. Reinvested capital gain dividends of regulated investment
companies.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
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