I 

115TH CONGRESS 

1ST SESSION H. R. 2017 

To amend the Internal Revenue Code of 1986 to provide for the indexing 

of certain assets for purposes of determining gain or loss of eligible 

individuals. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 6, 2017 

Mr. EMMER introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for the indexing of certain assets for purposes of determining gain or loss of eligible individuals. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retirement Inflation 

5 Protection Act of 2017’’. 


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1 SEC. 2. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 

2 DETERMINING GAIN OR LOSS OF ELIGIBLE 

3 INDIVIDUALS. 

4 (a) IN GENERAL.—Part II of subchapter O of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by redesignating section 1023 as section 1024 and by in7 serting after section 1022 the following new section: 

8 ‘‘SEC. 1023. INDEXING OF CERTAIN ASSETS FOR PURPOSES 

9 OF DETERMINING GAIN OR LOSS OF ELIGI10 BLE INDIVIDUALS. 

11 ‘‘(a) IN GENERAL.— 

12 ‘‘(1) INDEXED BASIS SUBSTITUTED FOR AD13 JUSTED BASIS.—Solely for purposes of determining 

14 gain or loss on the sale or other disposition by an 

15 eligible individual of an indexed asset which has 

16 been held by such individual for more than 3 years, 

17 the indexed basis of the asset shall be substituted 

18 for its adjusted basis. 

19 ‘‘(2) EXCEPTION FOR DEPRECIATION, ETC.— 

20 The deductions for depreciation, depletion, and am21 ortization shall be determined without regard to the 

22 application of paragraph (1) to the taxpayer or any 

23 other person. 

24 ‘‘(3) WRITTEN DOCUMENTATION REQUIRE25 MENT.—Paragraph (1) shall apply only with respect 

26 to indexed assets for which the taxpayer has written 


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1 documentation of the original purchase price paid or 

2 incurred by the taxpayer to acquire such asset. 

3 ‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this 

4 section, the term ‘eligible individual’ means, with respect 

5 to any indexed asset, any individual if such individual has 

attained age 591 6 ⁄2 as of the date of the sale or other dis7 position of such asset. 

8 ‘‘(c) INDEXED ASSET.— 

9 ‘‘(1) IN GENERAL.—For purposes of this sec10 tion, the term ‘indexed asset’ means— 

11 ‘‘(A) common stock in a C corporation 

12 (other than a foreign corporation), or 

13 ‘‘(B) tangible property, 

14 which is a capital asset or property used in the trade 

15 or business (as defined in section 1231(b)). 

16 ‘‘(2) STOCK IN CERTAIN FOREIGN CORPORA17 TIONS INCLUDED.—For purposes of this section— 

18 ‘‘(A) IN GENERAL.—The term ‘indexed 

19 asset’ includes common stock in a foreign cor20 poration which is regularly traded on an estab21 lished securities market. 

22 ‘‘(B) EXCEPTION.—Subparagraph (A) 

23 shall not apply to— 

24 ‘‘(i) stock of a foreign investment 

25 company, 


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1 ‘‘(ii) stock in a passive foreign invest2 ment company (as defined in section 

3 1296), 

4 ‘‘(iii) stock in a foreign corporation 

5 held by a United States person who meets 

6 the requirements of section 1248(a)(2), 

7 and 

8 ‘‘(iv) stock in a foreign personal hold9 ing company. 

10 ‘‘(C) TREATMENT OF AMERICAN DEPOSI11 TORY RECEIPTS.—An American depository re12 ceipt for common stock in a foreign corporation 

13 shall be treated as common stock in such cor14 poration. 

15 ‘‘(d) INDEXED BASIS.—For purposes of this sec16 tion— 

17 ‘‘(1) IN GENERAL.—The indexed basis for any 

18 asset is— 

19 ‘‘(A) the adjusted basis of the asset, in20 creased by 

21 ‘‘(B) the applicable inflation adjustment. 

22 ‘‘(2) APPLICABLE INFLATION ADJUSTMENT.— 

23 The applicable inflation adjustment for any asset is 

24 an amount equal to— 


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1 ‘‘(A) the adjusted basis of the asset, multi2 plied by 

3 ‘‘(B) the percentage (if any) by which— 

4 ‘‘(i) the gross domestic product 

5 deflator for the last calendar quarter end6 ing before the asset is disposed of, exceeds 

7 ‘‘(ii) the gross domestic product 

8 deflator for the last calendar quarter end9 ing before the asset was acquired by the 

10 taxpayer. 

11 The percentage under subparagraph (B) shall be 

rounded to the nearest 1 12 ⁄10 of 1 percentage point. 

13 ‘‘(3) GROSS DOMESTIC PRODUCT DEFLATOR.— 

14 The gross domestic product deflator for any cal15 endar quarter is the implicit price deflator for the 

16 gross domestic product for such quarter (as shown 

17 in the last revision thereof released by the Secretary 

18 of Commerce before the close of the following cal19 endar quarter). 

20 ‘‘(e) SUSPENSION OF HOLDING PERIOD WHERE DI21 MINISHED RISK OF LOSS; TREATMENT OF SHORT

22 SALES.— 

23 ‘‘(1) IN GENERAL.—If the taxpayer (or a re24 lated person) enters into any transaction which sub25 stantially reduces the risk of loss from holding any 


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1 asset, such asset shall not be treated as an indexed 

2 asset for the period of such reduced risk. 

3 ‘‘(2) SHORT SALES.— 

4 ‘‘(A) IN GENERAL.—In the case of a short 

5 sale of an indexed asset with a short sale period 

6 in excess of 3 years, for purposes of this title, 

7 the amount realized shall be an amount equal 

8 to the amount realized (determined without re9 gard to this paragraph) increased by the appli10 cable inflation adjustment. In applying sub11 section (d)(2) for purposes of the preceding 

12 sentence, the date on which the property is sold 

13 short shall be treated as the date of acquisition 

14 and the closing date for the sale shall be treat15 ed as the date of disposition. 

16 ‘‘(B) SHORT SALE PERIOD.—For purposes 

17 of subparagraph (A), the short sale period be18 gins on the day that the property is sold and 

19 ends on the closing date for the sale. 

20 ‘‘(f) DISPOSITIONS BETWEEN RELATED PERSONS.— 

21 ‘‘(1) IN GENERAL.—This section shall not apply 

22 to any sale or other disposition of property between 

23 related persons except to the extent that the basis 

24 of such property in the hands of the transferee is a 

25 substituted basis. 


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1 ‘‘(2) RELATED PERSONS DEFINED.—For pur2 poses of this section, the term ‘related persons’ 

3 means— 

4 ‘‘(A) persons bearing a relationship set 

5 forth in section 267(b), and 

6 ‘‘(B) persons treated as single employer 

7 under subsection (b) or (c) of section 414. 

8 ‘‘(g) TRANSFERS TO INCREASE INDEXING ADJUST9 MENT.—If any person transfers cash, debt, or any other 

10 property to another person and the principal purpose of 

11 such transfer is to secure or increase an adjustment under 

12 subsection (a), the Secretary may disallow part or all of 

13 such adjustment or increase. 

14 ‘‘(h) SPECIAL RULES.—For purposes of this sec15 tion— 

16 ‘‘(1) TREATMENT OF IMPROVEMENTS, ETC.—If 

17 there is an addition to the adjusted basis of any tan18 gible property or of any stock in a corporation dur19 ing the taxable year by reason of an improvement to 

20 such property or a contribution to capital of such 

21 corporation— 

22 ‘‘(A) such addition shall never be taken 

23 into account under subsection (d)(1)(A) if the 

24 aggregate amount thereof during the taxable 


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1 year with respect to such property or stock is 

2 less than $1,000, and 

3 ‘‘(B) such addition shall be treated as a 

4 separate asset acquired at the close of such tax5 able year if the aggregate amount thereof dur6 ing the taxable year with respect to such prop7 erty or stock is $1,000 or more. 

8 A rule similar to the rule of the preceding sentence 

9 shall apply to any other portion of an asset to the 

10 extent that separate treatment of such portion is ap11 propriate to carry out the purposes of this section. 

12 ‘‘(2) ASSETS WHICH ARE NOT INDEXED ASSETS

13 THROUGHOUT HOLDING PERIOD.—The applicable in14 flation adjustment shall be appropriately reduced for 

15 periods during which the asset was not an indexed 

16 asset. 

17 ‘‘(3) TREATMENT OF CERTAIN DISTRIBU18 TIONS.—A distribution with respect to stock in a 

19 corporation which is not a dividend shall be treated 

20 as a disposition. 

21 ‘‘(4) SECTION CANNOT INCREASE ORDINARY

22 LOSS.—To the extent that (but for this paragraph) 

23 this section would create or increase a net ordinary 

24 loss to which section 1231(a)(2) applies or an ordi25 nary loss to which any other provision of this title 


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1 applies, such provision shall not apply. The taxpayer 

2 shall be treated as having a long-term capital loss in 

3 an amount equal to the amount of the ordinary loss 

4 to which the preceding sentence applies. 

5 ‘‘(5) ACQUISITION DATE WHERE THERE HAS

6 BEEN PRIOR APPLICATION OF SUBSECTION (a)(1) 

7 WITH RESPECT TO THE TAXPAYER.—If there has 

8 been a prior application of subsection (a)(1) to an 

9 asset while such asset was held by the taxpayer, the 

10 date of acquisition of such asset by the taxpayer 

11 shall be treated as not earlier than the date of the 

12 most recent such prior application. 

13 ‘‘(i) REGULATIONS.—The Secretary shall prescribe 

14 such regulations as may be necessary or appropriate to 

15 carry out the purposes of this section.’’. 

16 (b) CLERICAL AMENDMENT.—The table of sections 

17 for part II of subchapter O of chapter 1 of such Code 

18 is amended by striking the item relating to section 1023 

19 and by inserting after the item relating to section 1022 

20 the following new items: 

‘‘Sec. 1022. Indexing of certain assets for purposes of determining gain or loss. 

‘‘Sec. 1023. Cross references.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to indexed assets acquired by the 


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1 taxpayer after December 31, 2017, in taxable years ending 

2 after such date. 

Æ 


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