No CRS summary available for this bill.
This section establishes a new nonrecognition provision (IRC §1046) allowing individuals—but not dependents, estates, or trusts—to defer gain recognition on capital gain dividends (as defined in IRC §852(b)(3)(C)) distributed by regulated investment companies (RICs, i.e., mutual funds and certain ETFs) if automatically reinvested in additional shares under a dividend reinvestment plan. Deferred gain is recognized pro rata upon a subsequent sale or redemption of shares in the RIC or in full upon the individual's death (except as provided by regulations); reinvested shares are treated as held for one year and a day from acquisition for capital gains purposes. The provision applies to taxable years ending after enactment, with conforming amendments to IRC §852(b)(3)(B) and the table of sections.