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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Senior Assets 
Verification Exemption (SAVE) from Capital Gains Tax 
Act of 2009’’. 
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SEC. 2. DEDUCTION FOR NET CAPITAL GAIN ON LONG- 
HELD ASSETS OF INDIVIDUALS WHO HAVE 
ATTAINED AGE 65. 
(a) IN GENERAL.—Part I of subchapter P of chapter 
1 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new section: 
‘‘SEC. 1203. DEDUCTION FOR NET CAPITAL GAIN ON LONG- 
HELD ASSETS OF INDIVIDUALS WHO HAVE 
ATTAINED AGE 65. 
‘‘(a) IN GENERAL.—In the case of an eligible tax-
payer, there shall be allowed a deduction against gross in-
come the amount equal to the taxpayer’s qualified net cap-
ital gain for the taxable year. 
‘‘(b) ELIGIBLE TAXPAYER.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘eligible taxpayer’ 
means any individual who has attained age 65 before 
the close of the taxable year. 
‘‘(2) JOINT RETURNS.—In the case of a tax-
payer filing a joint return, such taxpayer shall be 
treated as an eligible individual if either spouse has 
attained age 65 before the close of the taxable year. 
‘‘(c) QUALIFIED NET CAPITAL GAIN.—For purposes 
of this section, the term ‘qualified net capital gain’ means 
the lesser of— 
‘‘(1) net capital gain, or 
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‘‘(2) net capital gain determined by taking into 
account only assets held for at least 15 years.’’. 
(b) COORDINATION WITH MAXIMUM CAPITAL GAINS 
RATES.—Paragraph (2) of section 1(h) of such Code is 
amended to read as follows: 
‘‘(2) REDUCTION OF NET CAPITAL GAIN.—For 
purposes of this subsection, the net capital gain for 
any taxable year shall be reduced (but not below 
zero) by the sum of— 
‘‘(A) the amount which the taxpayer takes 
into account as investment income under sec-
tion 163(d)(4)(B)(iii), and 
‘‘(B) the deduction allowed by section 
1203.’’. 
(c) DEDUCTION ALLOWABLE
IN COMPUTING AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
such Code (defining adjusted gross income) is amended 
by inserting after paragraph (21) the following new para-
graph: 
‘‘(22) CERTAIN NET CAPITAL GAIN OF INDIVID-
UALS ATTAINING AGE 65.—The deduction allowed by 
section 1203.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Subparagraph (E) of section 163(d)(4) of 
such Code is amended to read as follows: 
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‘‘(E) COORDINATION WITH CAPITAL GAINS 
DEDUCTION.—The net capital gain taken into 
account under section 1202 for any taxable 
year shall be reduced (but not below zero) by 
the amount which the taxpayer takes into ac-
count as investment income under subpara-
graph (B)(iii) for such year.’’. 
(2) Subparagraph (B) of section 172(d)(2) of 
such Code is amended to read as follows: 
‘‘(B) the exclusion under section 1202, and 
the deduction under section 1203, shall not be 
allowed.’’. 
(3) Paragraph (4) of section 691(c) of such 
Code is amended by inserting ‘‘1203,’’ after 
‘‘1202,’’. 
(4) Paragraph (2) of section 871(a) of such 
Code is amended by inserting ‘‘or 1203,’’ after 
‘‘1202,’’. 
(5) Paragraph (1) of section 1402(i) of such 
Code is amended by inserting ‘‘, and the deduction 
provided by section 1203 shall not apply’’ before the 
period at the end thereof. 
(6) The table of sections for part I of sub-
chapter P of chapter 1 of such Code is amended by 
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.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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