House Study Bill 546



                                       HOUSE FILE       
                                       BY  (PROPOSED COMMITTEE ON
                                            JUDICIARY BILL BY
                                            CHAIRPERSON PAULSEN)


    Passed House, Date                Passed Senate,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to the holding period for purposes of certain
  2    capital assets under the individual income tax and including
  3    effective and applicability date provisions.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 5204YC 81
  6 mg/sh/8

PAG LIN



  1  1    Section 1.  Section 422.7, subsection 21, Code Supplement
  1  2 2005, is amended by adding the following new unnumbered
  1  3 paragraph:
  1  4    NEW UNNUMBERED PARAGRAPH.  For purposes of this subsection,
  1  5 the term "held" shall be determined with reference to the
  1  6 holding period provisions of section 1223 of the Internal
  1  7 Revenue Code and the federal regulations adopted pursuant
  1  8 thereto.
  1  9    Sec. 2.  APPLICABILITY DATE PROVISIONS.  This Act, being
  1 10 deemed of immediate importance, takes effect upon enactment
  1 11 and applies to all of the following:
  1 12    1.  Sales made on or after the effective date of this Act.
  1 13    2.  Determining the holding period for sales made on or
  1 14 after the effective date of this Act.
  1 15    3.  Tax years ending on or after the effective date of this
  1 16 Act.
  1 17                           EXPLANATION
  1 18    This bill requires that the computation of the holding
  1 19 period for purposes of the capital gains deduction under the
  1 20 state individual income tax be determined with reference to
  1 21 the federal holding period provisions of section 1223 of the
  1 22 Internal Revenue Code.  These provisions, in some cases, do
  1 23 not limit the holding period to actual ownership.
  1 24    The bill takes effect upon enactment and applies to sales
  1 25 made on or after the effective date of the bill and during tax
  1 26 years ending on or after the effective date of the bill.
  1 27 LSB 5204YC 81
  1 28 mg:rj/sh/8