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Generating Retirement Ownership through Long-Term Holding
To amend the Internal Revenue Code of 1986 to allow individuals to defer recognition of reinvested capital gains distributions from regulated investment companies.
Summary
The bill allows individuals to defer recognizing capital gains when capital gain distributions from mutual funds are automatically reinvested in additional shares of the same fund. The deferred gain is recognized later when the individual sells or redeems shares from the fund, with the gain recognized proportional to the shares sold, or upon the individual's death when any remaining deferred gain is recognized. Reinvested shares are treated as held for more than one year for tax purposes. The provision does not apply to dependents, estates, or trusts, and becomes effective for taxable years ending after enactment.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Sen. Cornyn, John [R-TX] (R-TX)
2 cosponsors
- Sen. Cruz, Ted [R-TX] (R-TX)
- Sen. Scott, Tim [R-SC] (R-SC)
Money behind the sponsor
Top reported contributors to John Cornyn’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- CAPITAL GROUP $22,500
- ANDREESSEN HOROWITZ $16,500
- PALANTIR TECHNOLOGIES $13,686
- WINKLEVOSS CAPITAL MANAGEMENT $13,200
- BLACKSTONE $12,600
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for John Cornyn → · Outside spending →
Actions (2)
- May 21, 2025 Read twice and referred to the Committee on Finance. · senate
- May 21, 2025 Introduced in Senate
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
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>
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