S 107
112th CONGRESS
1st Session
S. 107
To amend the Internal Revenue Code of 1986 to treat income
earned by mutual funds from exchange-traded funds holding precious metal
bullion as qualifying income.
IN THE SENATE OF THE UNITED STATES
January 25 (legislative day, January 5), 2011
Mr. ENSIGN introduced the following bill; which was read twice and
referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to treat income
earned by mutual funds from exchange-traded funds holding precious metal
bullion as qualifying income.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. INCOME EARNED BY MUTUAL FUNDS FROM EXCHANGE-TRADED FUNDS
HOLDING PRECIOUS METAL BULLION TREATED AS QUALIFYING INCOME.
(a) In General- Section 851 of the Internal Revenue Code of 1986, as
amended by the Regulated Investment Company Modernization Act of 2010,
is amended by adding at the end the following new subsection:
`(j) Bullion Exchange-Traded Funds-
`(1) IN GENERAL- In the case of any interest in a trust which is described
in paragraph (2)--
`(A) such interest shall not fail to be treated as a security for
purposes of this section by reason of any provision of subpart E
of part I of subchapter J (relating to grantors and others treated
as substantial owners),
`(B) any net income derived from such interest shall be treated
for purposes of subsection (b)(2) as gain from the disposition of
such interest, and
`(C) the last sentence of subsection (b) shall not apply to such
interest.
`(2) INTERESTS IN BULLION EXCHANGE-TRADED FUNDS DESCRIBED- An interest
in a trust is described in this paragraph if--
`(A) such interest is a security (as defined in section 2(a)(36)
of the Investment Company Act of 1940, as amended), determined without
regard to subpart E of part I of subchapter J,
`(B) such interests are regularly traded on an established securities
market in the United States, and
`(C) at least 95 percent of the assets of the trust are bullion
described in section 408(m)(3)(B).'.
(b) Effective Date- The amendment made by this section shall apply to
taxable years beginning after the date of the enactment of this Act.
END
