Senate File 2271 - Introduced SENATE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 2093) Passed Senate, Date Passed House, 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 5204SV 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. RETROACTIVE APPLICABILITY DATE PROVISIONS. This 1 10 Act, being deemed of immediate importance, takes effect upon 1 11 enactment and retroactively applies to all of the following: 1 12 1. Sales made on or after January 1, 2006. 1 13 2. Determining the holding period for sales made on or 1 14 after January 1, 2006. 1 15 3. Tax years ending on or after January 1, 2006. 1 16 EXPLANATION 1 17 This bill requires that the computation of the holding 1 18 period for purposes of the capital gains deduction under Code 1 19 section 422.7, subsection 21, be determined in the same manner 1 20 as the holding period of assets is determined for federal tax 1 21 purposes under Internal Revenue Code section 1223. These 1 22 provisions will, in some cases, add the holding period of 1 23 other property or the holding period of another owner to the 1 24 holding period of the taxpayer in determining whether the 1 25 required 10=year holding period has been satisfied, such as 1 26 property received in a like=kind exchange, property received 1 27 by gift, or property purchased from the proceeds of an 1 28 involuntary conversion. 1 29 The bill takes effect upon enactment and applies 1 30 retroactively to January 1, 2006, and applies to sales made on 1 31 or after January 1, 2006, during tax years ending on or after 1 32 that date. 1 33 LSB 5204SV 81 1 34 mg:rj/sh/8