The Secure Family Futures Act of 2024 changes how insurance companies are taxed when they sell certain debt instruments like bonds and notes. Currently, when insurance companies sell these debt holdings, they may qualify for capital gains treatment under tax law. This bill excludes debt held by most insurance companies from being treated as capital assets, meaning gains from selling this debt would be taxed as ordinary income rather than capital gains. The bill applies to most traditional insurance companies but excludes certain specialized types, including mutual insurance companies that have made specific tax elections, foreign insurance companies, and captive insurance arrangements. The changes take effect for sales and dispositions occurring after the bill is enacted, with a transition rule allowing companies to treat existing capital losses from pre-enactment debt sales as net operating loss carryovers.
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