I 

116TH CONGRESS 

2D SESSION H. R. 8584 

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 

OCTOBER 13, 2020 

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 2020’’. 


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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 inserting after section 1017 the following new section: 

7 ‘‘SEC. 1018. INDEXING OF CERTAIN ASSETS FOR PURPOSES 

8 OF DETERMINING GAIN OR LOSS OF ELIGI9 BLE INDIVIDUALS. 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) INDEXED BASIS SUBSTITUTED FOR AD12 JUSTED BASIS.—Solely for purposes of determining 

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

14 eligible individual of an indexed asset which has 

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

16 the indexed basis of the asset shall be substituted 

17 for its adjusted basis. 

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

19 The deductions for depreciation, depletion, and am20 ortization shall be determined without regard to the 

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

22 other person. 

23 ‘‘(3) WRITTEN DOCUMENTATION REQUIRE24 MENT.—Paragraph (1) shall apply only with respect 

25 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) C-CPI-U for the last calendar 

5 month ending before the asset is disposed 

6 of, exceeds 

7 ‘‘(ii) C-CPI-U for the last calendar 

8 month ending before the asset was ac9 quired by the taxpayer. 

10 The percentage under subparagraph (B) shall be 

rounded to the nearest 1 11 ⁄10 of 1 percentage point. 

12 ‘‘(3) C-CPI-U.— 

13 ‘‘(A) IN GENERAL.—The term ‘C-CPI-U’ 

14 means the Chained Consumer Price Index for 

15 All Urban Consumers (as published by the Bu16 reau of Labor Statistics of the Department of 

17 Labor). The values of the Chained Consumer 

18 Price Index for All Urban Consumers taken 

19 into account for purposes of determining the 

20 cost-of-living adjustment for any calendar 

21 month under this subsection shall be the latest 

22 values so published as of the date on which 

23 such Bureau publishes the initial value of the 

24 Chained Consumer Price Index for All Urban 


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1 Consumers for the month which precedes such 

2 calendar month by 4 months. 

3 ‘‘(B) DETERMINATION FOR CALENDAR

4 MONTH.—The C-CPI-U for any calendar month 

5 is the average of the C-CPI-U as of the close 

6 of the 12-month period ending with the month 

7 which precedes such calendar month by 4 

8 months. 

9 ‘‘(e) SUSPENSION OF HOLDING PERIOD WHERE DI10 MINISHED RISK OF LOSS; TREATMENT OF SHORT

11 SALES.— 

12 ‘‘(1) IN GENERAL.—If the taxpayer (or a re13 lated person) enters into any transaction which sub14 stantially reduces the risk of loss from holding any 

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

16 asset for the period of such reduced risk. 

17 ‘‘(2) SHORT SALES.— 

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

19 sale of an indexed asset with a short sale period 

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

21 the amount realized shall be an amount equal 

22 to the amount realized (determined without re23 gard to this paragraph) increased by the appli24 cable inflation adjustment. In applying sub25 section (d)(2) for purposes of the preceding 


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1 sentence, the date on which the property is sold 

2 short shall be treated as the date of acquisition 

3 and the closing date for the sale shall be treat4 ed as the date of disposition. 

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

6 of subparagraph (A), the short sale period be7 gins on the day that the property is sold and 

8 ends on the closing date for the sale. 

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

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

11 to any sale or other disposition of property between 

12 related persons except to the extent that the basis 

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

14 substituted basis. 

15 ‘‘(2) RELATED PERSONS DEFINED.—For pur16 poses of this section, the term ‘related persons’ 

17 means— 

18 ‘‘(A) persons bearing a relationship set 

19 forth in section 267(b), and 

20 ‘‘(B) persons treated as single employer 

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

22 ‘‘(g) TRANSFERS TO INCREASE INDEXING ADJUST23 MENT.—If any person transfers cash, debt, or any other 

24 property to another person and the principal purpose of 

25 such transfer is to secure or increase an adjustment under 


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

2 such adjustment or increase. 

3 ‘‘(h) SPECIAL RULES.—For purposes of this sec4 tion— 

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

6 there is an addition to the adjusted basis of any tan7 gible property or of any stock in a corporation dur8 ing the taxable year by reason of an improvement to 

9 such property or a contribution to capital of such 

10 corporation— 

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

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

13 aggregate amount thereof during the taxable 

14 year with respect to such property or stock is 

15 less than $1,000, and 

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

17 separate asset acquired at the close of such tax18 able year if the aggregate amount thereof dur19 ing the taxable year with respect to such prop20 erty or stock is $1,000 or more. 

21 A rule similar to the rule of the preceding sentence 

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

23 extent that separate treatment of such portion is ap24 propriate to carry out the purposes of this section. 


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

2 THROUGHOUT HOLDING PERIOD.—The applicable in3 flation adjustment shall be appropriately reduced for 

4 periods during which the asset was not an indexed 

5 asset. 

6 ‘‘(3) TREATMENT OF CERTAIN DISTRIBU7 TIONS.—A distribution with respect to stock in a 

8 corporation which is not a dividend shall be treated 

9 as a disposition. 

10 ‘‘(4) SECTION CANNOT INCREASE ORDINARY

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

12 this section would create or increase a net ordinary 

13 loss to which section 1231(a)(2) applies or an ordi14 nary loss to which any other provision of this title 

15 applies, such provision shall not apply. The taxpayer 

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

17 an amount equal to the amount of the ordinary loss 

18 to which the preceding sentence applies. 

19 ‘‘(5) ACQUISITION DATE WHERE THERE HAS

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

21 WITH RESPECT TO THE TAXPAYER.—If there has 

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

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

24 date of acquisition of such asset by the taxpayer 


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

2 most recent such prior application. 

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

4 such regulations as may be necessary or appropriate to 

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

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

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

8 is amended by inserting after the item relating to section 

9 1017 the following new item: 

‘‘Sec. 1018. Indexing of certain assets for purposes of determining gain or loss 

of eligible individuals.’’. 

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

11 this section shall apply to sales or other dispositions after 

12 the date of the enactment of this Act, in taxable years 

13 ending after such date. 

Æ 


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