Sponsors (34)
The bill raises revenue and curbs wealthy taxpayers' use of loopholes by taxing unrealized gains and limiting preferences, but it increases tax bills for some, creates liquidity and investment pressures for small/closely held businesses, and substantially expands compliance and reporting burdens.
High‑income individuals and applicable taxpayers will face annual taxation on unrealized gains, elimination of the step‑up‑at‑death benefit, and restrictions on several tax preferences (plus NIIT application), which will raise federal revenue and reduce tax avoidance by the very wealthy.
Taxpayers subject to mark‑to‑market rules can carry marked‑to‑market losses back up to three years and have those carrybacks treated as long‑term capital losses in prior years, producing refunds or lower prior‑year tax bills and preserving loss value.
Requiring reporting for large deferred compensation, severance, and insurance/annuity payments increases transparency and improves the IRS's ability to enforce tax rules.
Owners of illiquid or closely held assets (including small‑business owners and many retirees) could owe significant tax on appreciated but non‑liquid assets, forcing asset sales, hardship, or complex planning to cover tax bills.
Expanded annual mark‑to‑market taxation, new reporting rules, and complex ordering/characterization rules will raise compliance costs, require more recordkeeping, increase valuation disputes, and likely produce more audits and taxpayer stress.
Individuals designated as 'applicable taxpayers' may face higher tax bills because the NIIT applies regardless of AGI thresholds, increasing tax on investment income by roughly 3.8% for affected filers.
Based on analysis of 6 sections of legislative text.
Imposes annual mark‑to‑market taxation and closes "buy, borrow, die" loopholes for high‑wealth taxpayers while changing carryback, NIIT, expatriation, and like‑kind exchange rules.
Official title: To amend the Internal Revenue Code of 1986 to eliminate tax loopholes that allow billionaires to defer tax indefinitely through planning strategies such as "buy, borrow, die", to modify over 30 tax provisions so that billionaires are required to pay taxes annually, and for other purposes.
Introduced September 17, 2025 by Stephen Cohen · Last progress September 17, 2025
Imposes annual taxation on unrealized appreciation and related tax‑preferred strategies used by wealthy taxpayers by implementing a mark‑to‑market regime and closing ‘‘buy, borrow, die’’ loopholes; tightens rules that let heirs receive untaxed gains at death. It also changes several related tax provisions: special carryback rules for marked‑to‑market losses, broader application of the 3.8% net investment income tax for defined high‑wealth taxpayers, modified expatriation mark‑to‑market treatment, and limits on like‑kind exchange and certain tax‑free transfer rules. Many of the changes apply to taxable years beginning after December 31, 2025.