Generating Retirement Ownership through Long-Term Holding
Sponsored By: Senator Cornyn, John [R-TX]
Introduced
Summary
Defer taxes on reinvested capital gain dividends for individual shareholders. It would postpone tax on gains from capital gain dividends that are automatically reinvested until sale, redemption, or the investor's death and treat those shares as long-term holdings.
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- Individual investors and households would only recognize gain tied to reinvested capital gain dividends when they later sell or redeem the fund shares or upon the holder's death. The holding period for reinvested shares would be treated as 1 year and 1 day from acquisition.
- At the time of recognition the deferred gain would be allocated to the portion of total gain that matches the shares sold or redeemed for tax calculation purposes.
- The rule would not apply to a person who is claimed as a dependent on another taxpayer's return or to estates and trusts. The bill would authorize the Secretary to issue regulations and would apply to taxable years ending after enactment.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Delay tax on reinvested gains
If enacted, you could delay paying tax on a capital gain dividend that is automatically reinvested in additional RIC shares. Shares bought by reinvestment would count as held for one year and one day. When you later sell or redeem shares, you would include the deferred gain equal to the fraction of your shares sold. Any deferred gain left at your death would be included in your final year's income. It would not apply to estates, trusts, or to people claimed as dependents by another taxpayer. The Treasury would issue rules to implement this. The change would apply to taxable years ending after the date of enactment.
Sponsors & CoSponsors
Sponsor
Cornyn, John [R-TX]
TX • R
Cosponsors
Sen. Scott, Tim [R-SC]
SC • R
Sponsored 4/30/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov