To amend the Internal Revenue Code of 1986 to prevent the conversion of ordinary income or short-term capital gain into income eligible for the long-term capital gain rates, and for other purposes.

Amends the Internal Revenue Code to treat a gain as a short-term capital gain to the extent such gain exceeds the net underlying long-term capital gain where the taxpayer has gain from a constructive ownership transaction with respect to any financial position and such gain otherwise would be treated as a long-term capital gain. Provides that, to the extent such gain is treated as a long-term capital gain after the application of the previous sentence, the determination of the applicable capital gain rate (or rates) shall be determined on the basis of the respective rate (or rates) that would have been applicable to the net underlying long-term capital gain. Sets forth definitions and exceptions.