[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7760 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7760
To amend the Internal Revenue Code of 1986 to treat certain gains and
dividends derived from counties of concern as ordinary income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 20, 2024
Mr. Sherman (for himself, Mrs. Spartz, Mr. Doggett, and Mr. Foster)
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 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, 2025.
<all>