Patriotic Investment Act

The Patriotic Investment Act (HR 9843) changes how gains from selling certain investments linked to China are taxed. It requires that gains from "disqualified PRC securities" - such as stocks in Chinese government entities, the Communist Party, Chinese-owned companies, or individuals from mainland China (with exceptions for U.S. citizens and Taiwan residents) - be treated as ordinary income and taxed at the highest rate, rather than as capital gains. The bill also denies foreign tax credits for income derived from these sales. These changes apply to transactions occurring six months after the bill's enactment.