119-s1839

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1839 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1839

 To amend the Internal Revenue Code of 1986 to allow individuals to 
 defer recognition of reinvested capital gains distributions from 
 regulated investment companies.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 May 21, 2025

 Mr. Cornyn 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 ``Generating Retirement Ownership 
through Long-Term Holding''.

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 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 
 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.--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.
 ``
            (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.
 <all>