No Capital Gains Allowance for American Adversaries Act

Treats gains from certain securities and related property tied to designated “countries of concern” as ordinary income instead of capital gains, and expands related tax rules (dividend treatment and estate/basis rules) so these types of holdings are taxed differently. The SEC and Treasury must identify covered securities/property and issue implementing guidance. The changes apply to dispositions and dividends on or after January 1, 2026.

This shifts tax treatment for investors holding targeted foreign-linked assets, creates new reporting and compliance responsibilities for financial firms and issuers, and aims to discourage investment exposure to assets tied to the listed countries by raising the tax cost of sale and distributions.