Sponsors (4)
The bill lets funds count certain precious-metals income as qualifying RIC income to preserve pass-through tax treatment and lower taxes for affected investors, at the cost of modestly reduced corporate tax revenue and greater retail exposure to volatile metal investments.
Regulated investment companies (RICs) and their investors: income from qualifying precious-metals investments will count toward the 90% RIC qualifying-income test, making it easier for funds that hold precious metals to keep tax-favored pass-through status and potentially lowering taxes for investors by avoiding corporate-level taxation.
Retail investors and middle-class families: expanding qualifying income may lead to greater retail exposure to precious-metals-linked funds, increasing investors' exposure to volatile metal prices and the risk of larger losses for those who don't understand or cannot absorb that volatility.
U.S. government and general taxpayers: broadening the definition of qualifying RIC income could modestly reduce corporate tax receipts if more funds retain RIC status instead of being taxed as corporations.
Based on analysis of 2 sections of legislative text.
Explicitly adds "precious metals" to the income categories that count toward the 90% gross income test for regulated investment companies.
Adds "precious metals" to the types of income that count toward the 90% gross income test for regulated investment companies (RICs). In practice, income from precious metals will explicitly qualify as qualifying income for RIC status beginning for taxable years after enactment.
Official title: Amend the Internal Revenue Code of 1986 to provide that income received by a regulated investment company from precious metals shall be treated as qualifying income.
Introduced March 12, 2025 by Catherine Marie Cortez Masto · Last progress March 12, 2025