119-s2047

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2047 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2047

 To amend the Internal Revenue Code of 1986 to treat certain gains and 
 dividends derived from counties of concern as ordinary income.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 June 12, 2025

 Mr. Ricketts 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 treat certain gains and 
 dividends derived from counties of concern as ordinary income.

 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 ``No Capital Gains Allowance for 
American Adversaries Act''.

SEC. 2. CERTAIN GAINS AND DIVIDENDS DERIVED FROM COUNTRIES OF CONCERN 
 TREATED AS ORDINARY INCOME.

    (a) In General.--Part IV 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. 1261. GAINS DERIVED FROM COUNTRIES OF CONCERN TREATED AS 
 ORDINARY INCOME.

 ``

    (a) In General.--Gain from the sale, exchange, or other 
disposition of specified country of concern property shall be treated 
as ordinary income. Such gain shall be recognized notwithstanding any 
other provision of this title.
 ``

    (b) Specified Country of Concern Property.--For purposes of this 
section:
 ``

    (1) In general.--The term `specified country of concern 
 property' means--
 ``
        (A) any registered or unregistered security of a 
 company or other entity, as determined by criteria 
 established by the Securities and Exchange Commission 
 and the Secretary of the Treasury--
 ``
            (i) which is incorporated or otherwise 
 organized in a country of concern,
 ``
            (ii) which has a majority of such company 
 or other entity's assets or employees located 
 in a country of concern,
 ``
            (iii) which is owned by, controlled by, 
 or subject to the jurisdiction or direction of 
 a government of a country of concern,
 ``
            (iv) where a majority of such company or 
 other entity's value depends on the revenues, 
 profits, market capitalization, assets, or the 
 value of a security (including options to 
 purchase or sell) of companies or other 
 entities described under clause
            (i) ,
            (ii) , or
            (iii) , or
 ``
            (v) where such company or other entity is 
 controlled by any company or other entity 
 described under clause
            (i) ,
            (ii) , or
            (iii) , and
 ``
        (B) any property (other than securities) which is 
 located or used in a country of concern.
 ``

    (2) Additional 

=== definitions. ===
-For purposes of paragraph

    (1) :
 ``
        (A) Controlled by.--The term `controlled by' has 
 the meaning given that term under 

section 230.405 of 
 title 17, Code of Federal Regulations.
 ``
        (B) Country of concern.--The term `country of 
 concern' means the People's Republic of China 
 (including Hong Kong and Macao and excluding Taiwan), 
 Russia, Belarus, Iran, and North Korea.''.

    (b) Dividends.--

Section 1

    (h)

    (11)
            (C) 
            (iii) of such Code is amended by 
striking ``and'' at the end of subclause
            (I) , by striking the period at 
the end of subclause
            (II) and inserting ``, and'', and by adding at the 
end the following new subclause:
 ``
            (III) any foreign corporation 
 described in 

section 1261

    (b)

    (1)
        (A) as 
 of the date on which the dividend is 
 paid.''.
            (c) Denial of Step-Up in Basis at Death.--

Section 1014

    (a) of such 
Code is amended by striking ``or'' at the end of paragraph

    (3) , by 
striking the period at the end of paragraph

    (4) and inserting ``, or'', 
and by adding at the end the following new paragraph:
 ``

    (5) in the case of specified country of concern property 
 (as defined in 

section 1261

    (b) ), the basis in the hands of the 
 decedent.''.
            (d) Notice to Purchasers.--Not later than 180 days after the date 
of the enactment of this Act, the Securities and Exchange Commission 
shall issue rules requiring any person selling, exchanging, or 
otherwise disposing of a security that is specified country of concern 
property (as defined under 

section 1261

    (b) of the Internal Revenue Code 
of 1986) to notify the other party to such sale, exchange, or 
disposition that any gains related to such security are treated as 
ordinary income under the Internal Revenue Code of 1986 and not treated 
as capital gains.

    (e) Publicly Available List of Securities.--

    (1) In general.--The Securities and Exchange Commission 
 shall publish on the website of the Commission a list of all 
 securities described under 

section 1261

    (b)

    (1)
        (A) of the 
 Internal Revenue Code of 1986.

    (2) Reporting requirements.--The Securities and Exchange 
 Commission may require such reports as the Commission 
 determines necessary to determine which securities are 
 described under 

section 1261

    (b)

    (1)
        (A) of the Internal Revenue 
 Code of 1986.

    (f) Rulemaking.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of the Treasury and the Securities 
and Exchange Commission shall issue such rules as may be necessary to 
implement this Act and the amendments made by this Act, including 
establishing the criteria described under 

section 1261

    (b)

    (1)
        (A) of the 
Internal Revenue Code of 1986.

    (g) Effective Date.--The amendments made by this section shall 
apply to dispositions of property, and dividends paid, on or after 
January 1, 2026.
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