Impute the Schedule-D-routed share of capital gain distributions within long_term_capital_gains (US)

[MaxGhenis]

Summary

The US bundle carries capital gain distributions only for filers who report them without Schedule D (non_sch_d_capital_gains = PUF E01100, ~$13.7B in 2026 across 4.0M tax units, SOI-calibrated). Filers with a Schedule D report their distributions on Schedule D line 13, where they fold into long_term_capital_gains (PUF P23250) and are no longer separable. That Schedule-D-routed slice is most of the dollars: ICI reports shareholders reinvested $234B of capital gain distributions in 2023 (all account types), and ~23M households hold ~$7T of long-term mutual fund assets in nonretirement accounts.

Without separating this component, reforms that treat fund distributions differently from other realized gains can't be modeled — currently requested for the GROWTH Act (H.R. 2089 / S. 1839), which defers tax on automatically reinvested RIC capital gain dividends. Companion engine fix: PolicyEngine/policyengine-us#8839 (E01100 was never entering AGI/NII; fixed and ready).

Proposal

Add a capital_gain_distributions_in_ltcg (name TBD) imputed component of long_term_capital_gains as a US donor stage:

1. Donor/targets: SOI Sales of Capital Assets study publishes capital gain distribution totals and their share of net long-term gains by AGI class; SOI Individual Complete Report line-item aggregates become Ledger target references by AGI band.
2. Imputation: predict the distribution share of each record's LTCG conditional on AGI, total LTCG, age, filing status — the same microimpute + calibrate pattern as the existing PUF-variable stages in packages/populace-build/src/populace/build/us/sources.py.
3. RIC/REIT split: Schedule D line 13 includes REIT capital gain dividends, which are outside the bill (subchapter M part II vs part I). Apportion with ICI (fund industry) vs NAREIT data; GROWTH-style reforms apply only to the RIC share.
4. Consistency + joint-distribution guard: non_sch_d_capital_gains + the new component should reconcile against total distribution aggregates, and the imputation should preserve the E01100/Schedule-D disjointness — 0.6% of E01100 dollars currently sit on records that also carry Schedule D gains, which is impossible on a real return (E01100 is definitionally no-Schedule-D) and interacts with the QDCGT worksheet's no-Schedule-D branch in the engine.

The base is inherently taxable-account-only (tax-deferred accounts don't pass distributions through to 1099-DIV), so no retirement-account carve-out is needed.

Motivation

Requested by The Tax Project for GROWTH Act analysis (revenue and household impacts of deferring reinvested capital gain distributions). Downstream layers — reinvestment/DRIP fraction as an ICI-sourced sensitivity parameter, and multi-year recapture timing — build on this and are out of scope here.

(Refiled from policyengine-us-data#1176 — that repo is deprecated in favor of populace.)

[MaxGhenis]

v1 shipped in #282 (deterministic national-share split; engine variable in PolicyEngine/policyengine-us#8850). Primary-source series for the documented follow-ups, all verified against original publications this session:

Year-specific levels — ICI Fact Book Table 30 ("Long-Term Mutual Funds: Paid and Reinvested Capital Gains by Type of Fund", $M, 1984–present; xlsx)

Year	Paid ($B)	Reinvested ($B)
2015	379.4	363.8
2021	821.7	787.4
2022	394.3	378.7
2023	245.5	234.0
2024	540.2	—
2025	740.3	—

Notes: series includes short-term capital gains distributions (table footnote) and all account types; 2015: 66% of distributions went to tax-deferred household accounts, 30% to taxable (2016 Fact Book, p. 254). Consistency check vs the SOI anchor: ICI 2015 paid $379.4B × ~30% taxable ≈ $114B at the industry level vs $79.6B reported on individual returns (SOCA) — plausible gap from ST distributions, tax-exempt holders, non-filers, and timing; the return-reported SOCA number is the right anchor for return-level imputation.

RIC/REIT split — NAREIT (Industry Tracker xlsx, "Dividends Paid", all listed REITs, recomputed vintage)

Year	REIT dividends paid ($B)	LTCG share (fact sheets)	Implied REIT capital-gain dividends ($B)
2015	46.5 (fact sheet)	22%	~10
2021	53.4 (tracker)	18%	~10
2022	62.9	16%	~10
2023	63.5	11%	~7

Caveats: the LTCG-percentage exists only in NAREIT fact sheets (market-cap-weighted, year attribution fuzzy on the 2015 edition), the dollar series only in the Tracker, and the two differ in vintage (Tracker recomputed back through 2021; fact-sheet dollars track the as-originally-reported series — e.g. 2020: $51.7B original vs $50.07B recomputed). Any "REIT capital-gain dividends" figure is a derived cross-source estimate, not a NAREIT-published number. First-order: REIT CGD ≈ $7–10B/yr against ~$68B+ total Schedule-D route — the RIC share of line 13 is roughly 85–90%.

Remaining for the banded v2

No published series pins by-AGI participation or tilt for the Schedule-D route; candidate approach is a two-part model shaped by the direct-route Table 1.4 bands + the SOCA "other assets" envelope (both already packaged in the #282 resource), calibrated to the ICI year level × taxable share, with the RIC/REIT factor above applied for RIC-only reforms.