(a) Exclusion from capital assets

Section 1221(a) of the Internal Revenue Code of 1986 is amended by striking or at the end of paragraph (7), by striking the period at the end of paragraph (8) and inserting ; or, and by adding at the end the following new paragraph:

(9)

any note, bond, debenture, or other evidence of indebtedness held by an applicable insurance company.

(b) Applicable insurance company defined

Section 1221(b) of such Code is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:

(4) Applicable insurance company

For purposes of subsection (a)(9), the term applicable insurance company means, with respect to any taxable year—

(A)

any insurance company other than an insurance company—

(i)

with respect to which an election is in effect under section 831(b)(2)(A)(iii) or 835(a) for such taxable year,

(ii)

which is a foreign corporation described in section 842, or

(iii)

which is an organization to which section 833 applies for such taxable year, or

(B)

a face-amount certificate company registered under the Investment Company Act of 1940.

(c) Effective date

The amendments made by this section shall apply to notes, bonds, debentures, or other evidence of indebtedness acquired by an applicable insurance company (as defined in section 1221(b)(4)) of such Code after December 31, 2025.

(a) In general

Section 1212(a)(1)(C) of the Internal Revenue Code of 1986 is amended to read as follows:

(C)

a capital loss carryover to each of the 10 taxable years succeeding the loss year, but only to the extent such loss—

(i)

is attributable to a foreign expropriation loss, or

(ii)

was incurred by an applicable insurance company (as defined in section 1221(b)(4)).

(b) Effective date

The amendment made by this section shall apply to net capital losses arising in taxable years beginning after December 31, 2025.