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No Capital Gains Allowance for American Adversaries Act
To amend the Internal Revenue Code of 1986 to treat certain gains and dividends derived from counties of concern as ordinary income.
Summary
This bill would amend the tax code to treat gains and dividends from investments in certain countries—China (including Hong Kong and Macao), Russia, Belarus, Iran, and North Korea—as ordinary income rather than capital gains, subjecting them to higher tax rates. It defines "specified country of concern property" to include securities of companies incorporated or primarily operating in these countries, as well as property located or used in them. The bill would also deny the usual tax step-up in basis that heirs receive when they inherit this property. Within 180 days, the Securities and Exchange Commission would be required to issue rules for sellers to notify buyers and to publish a publicly available list of affected securities, with the changes effective January 1, 2026.
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. Ricketts, Pete [R-NE] (R-NE)
Actions (2)
- Jun 12, 2025 Read twice and referred to the Committee on Finance. · senate
- Jun 12, 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
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. <all>
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