I
107TH CONGRESS
1ST SESSION
H. R. 2293
To amend the Internal Revenue Code of 1986 to provide a temporary
reduction in the maximum capital gains rate from 20 percent to 15 percent.
IN THE HOUSE OF REPRESENTATIVES
JUNE 21, 2001
Mr. RYAN of Wisconsin 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
a temporary reduction in the maximum capital gains
rate from 20 percent to 15 percent.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TEMPORARY REDUCTION IN CAPITAL GAINS
RATE.
(a) REDUCTION IN MAXIMUM RATE.—The following
sections of the Internal Revenue Code of 1986 are each
amended by striking ‘‘20 percent’’ and inserting ‘‘15 per-
cent’’:
(1) Section 1(h)(1)(C).
(2) Section 55(b)(3)(C).
(3) Section 1445(e)(1).
(4) 
The 
second 
sentence 
of 
section
7518(g)(6)(A).
(5) The second sentence of section 607(h)(6)(A)
of the Merchant Marine Act, 1936.
(b) TRANSITION
RULES
FOR
TAXABLE
YEARS
WHICH INCLUDE JUNE 1, 2001.—For purposes of apply-
ing section 1(h) of the Internal Revenue Code of 1986 in
the case of a taxable year which includes June 1, 2001—
(1) The amount of tax determined under sub-
paragraph (B) of section 1(h)(1) of such Code shall
be the sum of—
(A) 10 percent of the lesser of—
(i) the net capital gain taking into ac-
count only gain or loss properly taken into
account for the portion of the taxable year
on or after such date (determined without
regard to collectibles gain or loss, gain de-
scribed in section (1)(h)(6)(A)(i) of such
Code, and section 1202 gain), or
(ii) the amount on which a tax is de-
termined under such subparagraph (with-
out regard to this subsection), plus
(B) 10 percent of the excess (if any) of—
(i) the amount on which a tax is de-
termined under such subparagraph (with-
out regard to this subsection), over
(ii) the amount on which a tax is de-
termined under subparagraph (A).
(2) The amount of tax determined under sub-
paragraph (C) of section (1)(h)(1) of such Code
shall be the sum of—
(A) 15 percent of the lesser of—
(i) the excess (if any) of the amount
of net capital gain determined under sub-
paragraph (A)(i) of paragraph (1) of this
subsection over the amount on which a tax
is determined under subparagraph (A) of
paragraph (1) of this subsection, or
(ii) the amount on which a tax is de-
termined under such subparagraph (C)
(without regard to this subsection), plus
(B) 20 percent of the excess (if any) of—
(i) the amount on which a tax is de-
termined under such subparagraph (C)
(without regard to this subsection), over
(ii) the amount on which a tax is de-
termined under subparagraph (A) of this
paragraph.
(3) For purposes of applying section 55(b)(3)
of such Code, rules similar to the rules of para-
graphs (1) and (2) of this subsection shall apply.
(4) In applying this subsection with respect to
any pass-thru entity, the determination of when
gains and loss are properly taken into account shall
be made at the entity level.
(5) Terms used in this subsection which are
also used in section 1(h) of such Code shall have the
respective meanings that such terms have in such
section.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to sales or exchanges made—
(A) on or after June 1, 2001, and
(B) in taxable years beginning before Jan-
uary 1, 2004.
(2) WITHHOLDING.—The amendment made by
subsection (a)(3) shall apply to amounts paid after
the date of the enactment of this Act.
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