I 

111TH CONGRESS 

1ST SESSION H. R. 396 

To amend the Internal Revenue Code of 1986 to provide that certain net 

capital gain of individuals who have attained age 65 shall not be subject 

to tax. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 9, 2009 

Mr. COHEN (for himself, Mr. WEXLER, and Mr. GALLEGLY) 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 

that certain net capital gain of individuals who have 

attained age 65 shall not be subject to tax. 

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 ‘‘Senior Assets 

5 Verification Exemption (SAVE) from Capital Gains Tax 

6 Act of 2009’’. 


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1 SEC. 2. DEDUCTION FOR NET CAPITAL GAIN ON LONG2 HELD ASSETS OF INDIVIDUALS WHO HAVE 

3 ATTAINED AGE 65. 

4 (a) IN GENERAL.—Part I of subchapter P of chapter 

5 1 of the Internal Revenue Code of 1986 is amended by 

6 adding at the end the following new section: 

7 ‘‘SEC. 1203. DEDUCTION FOR NET CAPITAL GAIN ON LONG8 HELD ASSETS OF INDIVIDUALS WHO HAVE 

9 ATTAINED AGE 65. 

10 ‘‘(a) IN GENERAL.—In the case of an eligible tax11 payer, there shall be allowed a deduction against gross in12 come the amount equal to the taxpayer’s qualified net cap13 ital gain for the taxable year. 

14 ‘‘(b) ELIGIBLE TAXPAYER.—For purposes of this 

15 section— 

16 ‘‘(1) IN GENERAL.—The term ‘eligible taxpayer’ 

17 means any individual who has attained age 65 before 

18 the close of the taxable year. 

19 ‘‘(2) JOINT RETURNS.—In the case of a tax20 payer filing a joint return, such taxpayer shall be 

21 treated as an eligible individual if either spouse has 

22 attained age 65 before the close of the taxable year. 

23 ‘‘(c) QUALIFIED NET CAPITAL GAIN.—For purposes 

24 of this section, the term ‘qualified net capital gain’ means 

25 the lesser of— 

26 ‘‘(1) net capital gain, or 


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1 ‘‘(2) net capital gain determined by taking into 

2 account only assets held for at least 15 years.’’. 

3 (b) COORDINATION WITH MAXIMUM CAPITAL GAINS

4 RATES.—Paragraph (2) of section 1(h) of such Code is 

5 amended to read as follows: 

6 ‘‘(2) REDUCTION OF NET CAPITAL GAIN.—For 

7 purposes of this subsection, the net capital gain for 

8 any taxable year shall be reduced (but not below 

9 zero) by the sum of— 

10 ‘‘(A) the amount which the taxpayer takes 

11 into account as investment income under sec12 tion 163(d)(4)(B)(iii), and 

13 ‘‘(B) the deduction allowed by section 

14 1203.’’. 

15 (c) DEDUCTION ALLOWABLE IN COMPUTING AD16 JUSTED GROSS INCOME.—Subsection (a) of section 62 of 

17 such Code (defining adjusted gross income) is amended 

18 by inserting after paragraph (21) the following new para19 graph: 

20 ‘‘(22) CERTAIN NET CAPITAL GAIN OF INDIVID21 UALS ATTAINING AGE 65.—The deduction allowed by 

22 section 1203.’’. 

23 (d) CONFORMING AMENDMENTS.— 

24 (1) Subparagraph (E) of section 163(d)(4) of 

25 such Code is amended to read as follows: 


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1 ‘‘(E) COORDINATION WITH CAPITAL GAINS

2 DEDUCTION.—The net capital gain taken into 

3 account under section 1202 for any taxable 

4 year shall be reduced (but not below zero) by 

5 the amount which the taxpayer takes into ac6 count as investment income under subpara7 graph (B)(iii) for such year.’’. 

8 (2) Subparagraph (B) of section 172(d)(2) of 

9 such Code is amended to read as follows: 

10 ‘‘(B) the exclusion under section 1202, and 

11 the deduction under section 1203, shall not be 

12 allowed.’’. 

13 (3) Paragraph (4) of section 691(c) of such 

14 Code is amended by inserting ‘‘1203,’’ after 

15 ‘‘1202,’’. 

16 (4) Paragraph (2) of section 871(a) of such 

17 Code is amended by inserting ‘‘or 1203,’’ after 

18 ‘‘1202,’’. 

19 (5) Paragraph (1) of section 1402(i) of such 

20 Code is amended by inserting ‘‘, and the deduction 

21 provided by section 1203 shall not apply’’ before the 

22 period at the end thereof. 

23 (6) The table of sections for part I of sub24 chapter P of chapter 1 of such Code is amended by 

25 adding at the end the following new item: 


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‘‘Sec. 1203. Deduction for net capital gain on long-held assets of individuals 

who have attained age 65.’’. 

1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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