S. 1335: Secure Family Futures Act of 2025

This bill, known as the Secure Family Futures Act of 2025, proposes to make changes to how certain insurance companies handle their investments and tax liabilities. Below are the main points outlined in the bill:

Exclusion of Debt from Capital Assets

The bill amends the Internal Revenue Code to specify that certain types of debt, including notes, bonds, and other evidence of indebtedness, held by specific insurance companies will not be treated as capital assets. This means that:

• These debts will not factor into calculations regarding capital gains or losses for tax purposes.
• This exclusion applies to "applicable insurance companies," which are defined as any insurance company that does not fall under certain exemptions, including those that have specific tax elections or classifications.

Capital Loss Carryovers Extended

Additionally, the bill allows applicable insurance companies to extend their capital loss carryovers from the previous maximum of 5 years to 10 years. This means that:

• If an applicable insurance company incurs a capital loss, it can carry that loss forward to offset future taxable income for up to 10 years.
• This policy will apply to capital losses arising from foreign expropriation or those incurred by applicable insurance companies starting in taxable years after December 31, 2025.

Effective Dates

The changes introduced by the bill will apply to:

• Notes, bonds, and other evidence of indebtedness acquired after December 31, 2025.
• Net capital losses arising in taxable years that begin after December 31, 2025.

Summary of Impact

Overall, this legislation aims to provide specific tax benefits to certain insurance companies by redefining how they account for their debt and by giving them more time to use their capital losses effectively. The bill seeks to modify existing tax regulations to better align with the financial realities faced by these companies.

Relevant Companies

• AIG (American International Group) - As an applicable insurance company, AIG may benefit from the exclusion of certain debts from being classified as capital assets, which could help manage their tax liabilities.
• PRU (Prudential Financial) - This company might also see a direct impact from the potential for extended capital loss carryovers, aiding in loss management over a longer period.