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Amends subsection (a)(1)(C) to allow a 10-year capital loss carryover not only for losses attributable to foreign expropriation, but also for losses incurred by an applicable insurance company (as defined in section 1221(b)(4)).
Adds a new paragraph (a)(9) excluding notes, bonds, debentures, or other evidence of indebtedness held by an "applicable insurance company" from the definition of capital asset, and inserts a new paragraph (b)(4) defining "applicable insurance company" while redesignating former paragraph (4) as paragraph (5).
Referred to the House Committee on Ways and Means.
Introduced April 1, 2025 by Randy Feenstra · Last progress April 1, 2025
Makes two targeted tax changes for insurance companies. First, it treats bonds and other debt they buy after 2025 as non‑capital assets, so any gain or loss when they sell is ordinary (not capital). Second, it lets certain capital losses be used over the next 10 tax years if they are from a foreign government taking property (expropriation) or if the loss was incurred by an applicable insurance company.
These changes aim to align tax rules with how insurers invest and to give them (and expropriation cases) more flexibility to use losses. The rules start with debt acquired after December 31, 2025, and with losses in tax years beginning after that date.
