,i #aafth ,,congress #b;d ,session ,h4 ,r4 #hehd ,,in ,,the ,,house ,,of ,,representatives ,october #ac1 #bjbj,mr4 ,emmer introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide for the indexing of certain assets for purposes of determining gain or loss of eligible individuals4 #a4 ,short title ,this ,act may be cited as the ,retirement ,inflation ,protection ,act of #bjbj4 #b4 ,indexing of certain assets for purposes of determining gain or loss of eligible individuals 7a7 ,in ,general ,part ,,ii of subchapter ,o of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #ajag the following new section3 #ajah4 ,indexing of certain assets for purposes of determining gain or loss of eligible individuals 7a7 ,in general 7#a7 ,indexed basis substituted for adjusted basis ,solely for purposes of determining gain or loss on the sale or other disposition by an eligible individual of an indexed asset which has been held by such individual for more than #c years1 the indexed basis of the asset shall be substituted for its adjusted basis4 7#b7 ,exception for depreciation1 etc ,the deductions for depreciation1 depletion1 and amortization shall be determined without regard to the application of paragraph 7#a7 to the taxpayer or any other person4 7#c7 ,written documentation requirement ,paragraph 7#a7 shall apply only with respect to indexed assets for which the taxpayer has written documentation of the original purchase price paid or incurred by the taxpayer to acquire such asset4 7b7 ,eligible individual ,for purposes of this section1 the term eligible individual means1 with respect to any indexed asset1 any individual if such individual has attained age #eia_/b as of the date of the sale or other disposition of such asset4 7c7 ,indexed asset 7#a7 ,in general ,for purposes of this section1 the term indexed asset means-- 7,a7 common stock in a ,c corporation 7other than a foreign corporation71 or 7,b7 tangible property1 which is a capital asset or property used in the trade or business 7as defined in section #abca7;b774 7#b7 ,stock in certain foreign corporations included ,for purposes of this section-- 7,a7 ,in general ,the term indexed asset includes common stock in a foreign corporation which is regularly traded on an established securities market4 7,b7 ,exception ,subparagraph 7,a7 shall not apply to-- 7i7 stock of a foreign investment company1 7ii7 stock in a passive foreign investment company 7as defined in section #abif71 7iii7 stock in a foreign corporation held by a ,united ,states person who meets the requirements of section #abdh7;a77#b71 and 7iv7 stock in a foreign personal holding company4 7,c7 ,treatment of ,american depository receipts ,an ,american depository receipt for common stock in a foreign corporation shall be treated as common stock in such corporation4 7d7 ,indexed basis ,for purposes of this section-- 7#a7 ,in general ,the indexed basis for any asset is-- 7,a7 the adjusted basis of the asset1 increased by 7,b7 the applicable inflation adjustment4 7#b7 ,applicable inflation adjustment ,the applicable inflation adjustment for any asset is an amount equal to-- 7,a7 the adjusted basis of the asset1 multiplied by 7,b7 the percentage 7if any7 by which-- 7i7 ,c-,,cpi-,u for the last calendar month ending before the asset is disposed of1 exceeds 7ii7 ,c-,,cpi-,u for the last calendar month ending before the asset was acquired by the taxpayer4 ,the percentage under subparagraph 7,b7 shall be rounded to the nearest #a_/aj of #a percentage point4 7#c7 ,c-,,cpi-,u 7,a7 ,in general ,the term ,c-,,cpi-,u means the ,chained ,consumer ,price ,index for ,all ,urban ,consumers 7as published by the ,bureau of ,labor ,statistics of the ,department of ,labor74 ,the values of the ,chained ,consumer ,price ,index for ,all ,urban ,consumers taken into account for purposes of determining the cost-of-living adjustment for any calendar month under this subsection shall be the latest values so published as of the date on which such ,bureau publishes the initial value of the ,chained ,consumer ,price ,index for ,all ,urban ,consumers for the month which precedes such calendar month by #d months4 7,b7 ,determination for calendar month ,the ,c-,,cpi-,u for any calendar month is the average of the ,c-,,cpi-,u as of the close of the #ab-month period ending with the month which precedes such calendar month by #d months4 7e7 ,suspension of holding period where diminished risk of loss2 treatment of short sales 7#a7 ,in general ,if the taxpayer 7or a related person7 enters into any transaction which substantially reduces the risk of loss from holding any asset1 such asset shall not be treated as an indexed asset for the period of such reduced risk4 7#b7 ,short sales 7,a7 ,in general ,in the case of a short sale of an indexed asset with a short sale period in excess of #c years1 for purposes of this title1 the amount realized shall be an amount equal to the amount realized 7determined without regard to this paragraph7 increased by the applicable inflation adjustment4 ,in applying subsection 7d77#b7 for purposes of the preceding sentence1 the date on which the property is sold short shall be treated as the date of acquisition and the closing date for the sale shall be treated as the date of disposition4 7,b7 ,short sale period ,for purposes of subparagraph 7,a71 the short sale period begins on the day that the property is sold and ends on the closing date for the sale4 7f7 ,dispositions between related persons 7#a7 ,in general ,this section shall not apply to any sale or other disposition of property between related persons except to the extent that the basis of such property in the hands of the transferee is a substituted basis4 7#b7 ,related persons defined ,for purposes of this section1 the term related persons means-- 7,a7 persons bearing a relationship set forth in section #bfg7;b71 and 7,b7 persons treated as single employer under subsection 7b7 or 7c7 of section #dad4 7g7 ,transfers ,to increase indexing adjustment ,if any person transfers cash1 debt1 or any other property to another person and the principal purpose of such transfer is to secure or increase an adjustment under subsection 7a71 the ,secretary may disallow part or all of such adjustment or increase4 7h7 ,special rules ,for purposes of this section-- 7#a7 ,treatment of improvements1 etc ,if there is an addition to the adjusted basis of any tangible property or of any stock in a corporation during the taxable year by reason of an improvement to such property or a contribution to capital of such corporation-- 7,a7 such addition shall never be taken into account under subsection 7d77#a77;,a7 if the aggregate amount thereof during the taxable year with respect to such property or stock is less than #a1jjj1 and 7,b7 such addition shall be treated as a separate asset acquired at the close of such taxable year if the aggregate amount thereof during the taxable year with respect to such property or stock is #a1jjj or more4 ,a rule similar to the rule of the preceding sentence shall apply to any other portion of an asset to the extent that separate treatment of such portion is appropriate to carry out the purposes of this section4 7#b7 ,assets which are not indexed assets throughout holding period ,the applicable inflation adjustment shall be appropriately reduced for periods during which the asset was not an indexed asset4 7#c7 ,treatment of certain distributions ,a distribution with respect to stock in a corporation which is not a dividend shall be treated as a disposition4 7#d7 ,section cannot increase ordinary loss ,to the extent that 7but for this paragraph7 this section would create or increase a net ordinary loss to which section #abca7;a77#b7 applies or an ordinary loss to which any other provision of this title applies1 such provision shall not apply4 ,the taxpayer shall be treated as having a long-term capital loss in an amount equal to the amount of the ordinary loss to which the preceding sentence applies4 7#e7 ,acquisition date where there has been prior application of subsection 7a77#a7 with respect to the taxpayer ,if there has been a prior application of subsection 7a77#a7 to an asset while such asset was held by the taxpayer1 the date of acquisition of such asset by the taxpayer shall be treated as not earlier than the date of the most recent such prior application4 7i7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section4 4 7b7 ,clerical amendment ,the table of sections for part ,,ii of subchapter ,o of chapter #a of such ,code is amended by inserting after the item relating to section #ajag the following new item3 ,sec4 #ajah4 ,indexing of certain assets for purposes of determining gain or loss of eligible individuals4 4 7c7 ,effective date ,the amendments made by this section shall apply to sales or other dispositions after the date of the enactment of this ,act1 in taxable years ending after such date4