Referred to the House Committee on Ways and Means.
This bill creates a new Internal Revenue Code section (1046) allowing individuals to defer recognition of capital gain dividends from regulated investment companies when those dividends are automatically reinvested under a dividend reinvestment plan. Deferred gain is recognized proportionally when the taxpayer later sells or redeems shares, and any unrecovered deferred gain is recognized and included in income at the taxpayer’s death.
Distributional impact: liberals worry benefits flow to wealthy investors
Relative to its intended legislative type, this bill is a substantive change to the Internal Revenue Code that clearly defines a nonrecognition rule for reinvested capital gain dividends and includes necessary conforming amendments, but it delegates significant operational detail to Treasury regulations and omits fiscal/reporting specifics.
This bill creates a new Internal Revenue Code section (1046) allowing individuals to defer recognition of capital gain dividends from regulated investment companies when those dividends are automatically reinvested under a dividend reinvestment plan.
Deferred gain is recognized proportionally when the taxpayer later sells or redeems shares, and any unrecovered deferred gain is recognized and included in income at the taxpayer’s death.
Shares acquired by reinvestment receive a holding period of more than one year and one day for holding-period purposes.
Technically narrow and administrable with bipartisan appeal, but potential revenue impact and legislative scheduling reduce standalone chances.
Relative to its intended legislative type, this bill is a substantive change to the Internal Revenue Code that clearly defines a nonrecognition rule for reinvested capital gain dividends and includes necessary conforming amendments, but it delegates significant operational detail to Treasury regulations and omits fiscal/reporting specifics.
Distributional impact: liberals worry benefits flow to wealthy investors
These are examples from the analysis, not a ranked list of the most-affected groups.
Distributional impact: liberals worry benefits flow to wealthy investors
Likely cautiously supportive of incentives for long-term ownership but concerned about distributional effects and revenue loss.
Sees benefit to retirement-oriented saving but worries the primary gains accrue to wealthier investors and mutual fund holders.
Wants offsets, anti-abuse safeguards, and reporting requirements to ensure fairness.
A pragmatic, split view: recognizes the policy goal of encouraging long-term investment but wary of revenue loss and administrative complexity.
Would seek a CBO cost estimate, clear regulations, and possibly a time-limited or targeted approach as compromise.
Generally favorable because it defers taxation and promotes investment and retirement ownership.
Views it as pro-investor tax relief, though some conservatives may object to any added complexity or to the provision forcing recognition at death rather than preserving broader estate step-up.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Technically narrow and administrable with bipartisan appeal, but potential revenue impact and legislative scheduling reduce standalone chances.
The bill has not accumulated any surfaced votes yet.
Distributional impact: liberals worry benefits flow to wealthy investors
Technically narrow and administrable with bipartisan appeal, but potential revenue impact and legislative scheduling reduce standalone chan…
Relative to its intended legislative type, this bill is a substantive change to the Internal Revenue Code that clearly defines a nonrecognition rule for reinvested capital gain dividends and includes necessary conformin…
Go beyond the headline summary with full stakeholder mapping, legislative design analysis, passage barriers, and lens-by-lens tradeoff breakdowns.