,i #aaf? ,,congress #b;d ,session ,h4 ,r4 #hehd ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,octob] #ac1 #bjbj,mr4 ,emm] introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to provide = ! index+ ( c]ta9 assets = purposes ( det]m9+ ga9 or loss ( eligible individuals4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,retirem5t ,inflation ,protection ,act ( #bjbj4 #b4 ,index+ ( c]ta9 assets = purposes ( det]m9+ ga9 or loss ( eligible individuals 7a7 ,9 ,g5]al ,"p ,,ii ( sub*apt] ,o ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] section #ajag ! foll[+ new section3 #ajah4 ,index+ ( c]ta9 assets = purposes ( det]m9+ ga9 or loss ( eligible individuals 7a7 ,9 g5]al 7#a7 ,index$ basis sub/itut$ = adju/$ basis ,solely = purposes ( det]m9+ ga9 or loss on ! sale or o!r disposition by an eligible individual ( an index$ asset :i* has be5 held by su* individual = m ?an #c ye>s1 ! index$ basis ( ! asset %all be sub/itut$ = its adju/$ basis4 7#b7 ,exception = depreciation1 etc ,! d$uctions = depreciation1 depletion1 & amortization %all be det]m9$ )\t reg>d to ! application ( p>agraph 7#a7 to ! taxpay] or any o!r p]son4 7#c7 ,writt5 docum5tation requirem5t ,p>agraph 7#a7 %all apply only ) respect to index$ assets = :i* ! taxpay] has writt5 docum5tation ( ! orig9al pur*ase price paid or incurr$ by ! taxpay] to acquire su* asset4 7b7 ,eligible individual ,= purposes ( ?is section1 ! t]m eligible individual means1 ) respect to any index$ asset1 any individual if su* individual has atta9$ age #eia_/b z ( ! date ( ! sale or o!r disposition ( su* asset4 7c7 ,index$ asset 7#a7 ,9 g5]al ,= purposes ( ?is section1 ! t]m index$ asset means-- 7,a7 common /ock 9 a ,c corporation 7o!r ?an a =eign corporation71 or 7,b7 tangible prop]ty1 :i* is a capital asset or prop]ty us$ 9 ! trade or bus9ess 7z def9$ 9 section #abca7;b774 7#b7 ,/ock 9 c]ta9 =eign corporations includ$ ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,! t]m index$ asset includes common /ock 9 a =eign corporation :i* is regul>ly trad$ on an e/abli%$ securities m>ket4 7,b7 ,exception ,subp>agraph 7,a7 %all n apply to-- 7i7 /ock ( a =eign inve/m5t company1 7ii7 /ock 9 a passive =eign inve/m5t company 7z def9$ 9 section #abif71 7iii7 /ock 9 a =eign corporation held by a ,unit$ ,/ates p]son :o meets ! requirem5ts ( section #abdh7;a77#b71 & 7iv7 /ock 9 a =eign p]sonal hold+ company4 7,c7 ,treatm5t ( ,am]ican depository receipts ,an ,am]ican depository receipt = common /ock 9 a =eign corporation %all be treat$ z common /ock 9 su* corporation4 7d7 ,index$ basis ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! index$ basis = any asset is-- 7,a7 ! adju/$ basis ( ! asset1 increas$ by 7,b7 ! applicable inflation adju/m5t4 7#b7 ,applicable inflation adju/m5t ,! applicable inflation adju/m5t = any asset is an am\nt equal to-- 7,a7 ! adju/$ basis ( ! asset1 multipli$ by 7,b7 ! p]c5tage 7if any7 by :i*-- 7i7 ,c-,,cpi-,u = ! la/ cal5d> mon? end+ be=e ! asset is dispos$ (1 exce$s 7ii7 ,c-,,cpi-,u = ! la/ cal5d> mon? end+ be=e ! asset 0 acquir$ by ! taxpay]4 ,! p]c5tage "u subp>agraph 7,b7 %all be r\nd$ to ! ne>e/ #a_/aj ( #a p]c5tage po9t4 7#c7 ,c-,,cpi-,u 7,a7 ,9 g5]al ,! t]m ,c-,,cpi-,u means ! ,*a9$ ,consum] ,price ,index = ,all ,urban ,consum]s 7z publi%$ by ! ,bureau ( ,labor ,/ati/ics ( ! ,dep>tm5t ( ,labor74 ,! values ( ! ,*a9$ ,consum] ,price ,index = ,all ,urban ,consum]s tak5 into acc\nt = purposes ( det]m9+ ! co/-(-liv+ adju/m5t = any cal5d> mon? "u ?is subsection %all be ! late/ values s publi%$ z ( ! date on :i* su* ,bureau publi%es ! initial value ( ! ,*a9$ ,consum] ,price ,index = ,all ,urban ,consum]s = ! mon? :i* prec$es su* cal5d> mon? by #d mon?s4 7,b7 ,det]m9ation = cal5d> mon? ,! ,c-,,cpi-,u = any cal5d> mon? is ! av]age ( ! ,c-,,cpi-,u z ( ! close ( ! #ab-mon? p]iod end+ ) ! mon? :i* prec$es su* cal5d> mon? by #d mon?s4 7e7 ,susp5sion ( hold+ p]iod :]e dim9i%$ risk ( loss2 treatm5t ( %ort sales 7#a7 ,9 g5]al ,if ! taxpay] 7or a relat$ p]son7 ent]s into any transaction :i* sub/antially r$uces ! risk ( loss f hold+ any asset1 su* asset %all n be treat$ z an index$ asset = ! p]iod ( su* r$uc$ risk4 7#b7 ,%ort sales 7,a7 ,9 g5]al ,9 ! case ( a %ort sale ( an index$ asset ) a %ort sale p]iod 9 excess ( #c ye>s1 = purposes ( ?is title1 ! am\nt realiz$ %all be an am\nt equal to ! am\nt realiz$ 7det]m9$ )\t reg>d to ?is p>agraph7 increas$ by ! applicable inflation adju/m5t4 ,9 apply+ subsection 7d77#b7 = purposes ( ! prec$+ s5t5ce1 ! date on :i* ! prop]ty is sold %ort %all be treat$ z ! date ( acquisition & ! clos+ date = ! sale %all be treat$ z ! date ( disposition4 7,b7 ,%ort sale p]iod ,= purposes ( subp>agraph 7,a71 ! %ort sale p]iod beg9s on ! day t ! prop]ty is sold & ends on ! clos+ date = ! sale4 7f7 ,dispositions betwe5 relat$ p]sons 7#a7 ,9 g5]al ,?is section %all n apply to any sale or o!r disposition ( prop]ty betwe5 relat$ p]sons except to ! ext5t t ! basis ( su* prop]ty 9 ! h&s ( ! transf]ee is a sub/itut$ basis4 7#b7 ,relat$ p]sons def9$ ,= purposes ( ?is section1 ! t]m relat$ p]sons means-- 7,a7 p]sons be>+ a relation%ip set =? 9 section #bfg7;b71 & 7,b7 p]sons treat$ z s+le employ] "u subsection 7b7 or 7c7 ( section #dad4 7g7 ,transf]s ,to increase index+ adju/m5t ,if any p]son transf]s ca%1 debt1 or any o!r prop]ty to ano!r p]son & ! pr9cipal purpose ( su* transf] is to secure or increase an adju/m5t "u subsection 7a71 ! ,secret>y may disall[ "p or all ( su* adju/m5t or increase4 7h7 ,special rules ,= purposes ( ?is section-- 7#a7 ,treatm5t ( improvem5ts1 etc ,if !re is an addition to ! adju/$ basis ( any tangible prop]ty or ( any /ock 9 a corporation dur+ ! taxable ye> by reason ( an improvem5t to su* prop]ty or a contribution to capital ( su* corporation-- 7,a7 su* addition %all nev] be tak5 into acc\nt "u subsection 7d77#a77;,a7 if ! aggregate am\nt !re( dur+ ! taxable ye> ) respect to su* prop]ty or /ock is less ?an #a1jjj1 & 7,b7 su* addition %all be treat$ z a sep>ate asset acquir$ at ! close ( su* taxable ye> if ! aggregate am\nt !re( dur+ ! taxable ye> ) respect to su* prop]ty or /ock is #a1jjj or m4 ,a rule simil> to ! rule ( ! prec$+ s5t5ce %all apply to any o!r portion ( an asset to ! ext5t t sep>ate treatm5t ( su* portion is appropriate to c>ry out ! purposes ( ?is section4 7#b7 ,assets :i* are n index$ assets ?r\gh\t hold+ p]iod ,! applicable inflation adju/m5t %all be appropriately r$uc$ = p]iods dur+ :i* ! asset 0 n an index$ asset4 7#c7 ,treatm5t ( c]ta9 di/ributions ,a di/ribution ) respect to /ock 9 a corporation :i* is n a divid5d %all be treat$ z a disposition4 7#d7 ,section _c increase ord9>y loss ,to ! ext5t t 7b = ?is p>agraph7 ?is section w\ld create or increase a net ord9>y loss to :i* section #abca7;a77#b7 applies or an ord9>y loss to :i* any o!r provision ( ?is title applies1 su* provision %all n apply4 ,! taxpay] %all be treat$ z hav+ a long-t]m capital loss 9 an am\nt equal to ! am\nt ( ! ord9>y loss to :i* ! prec$+ s5t5ce applies4 7#e7 ,acquisition date :]e !re has be5 prior application ( subsection 7a77#a7 ) respect to ! taxpay] ,if !re has be5 a prior application ( subsection 7a77#a7 to an asset :ile su* asset 0 held by ! taxpay]1 ! date ( acquisition ( su* asset by ! taxpay] %all be treat$ z n e>li] ?an ! date ( ! mo/ rec5t su* prior application4 7i7 ,regulations ,! ,secret>y %all prescribe su* regulations z may be necess>y or appropriate to c>ry out ! purposes ( ?is section4 4 7b7 ,cl]ical am5dm5t ,! table ( sections = "p ,,ii ( sub*apt] ,o ( *apt] #a ( su* ,code is am5d$ by ins]t+ aft] ! item relat+ to section #ajag ! foll[+ new item3 ,sec4 #ajah4 ,index+ ( c]ta9 assets = purposes ( det]m9+ ga9 or loss ( eligible individuals4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to sales or o!r dispositions aft] ! date ( ! enactm5t ( ?is ,act1 9 taxable ye>s end+ aft] su* date4