Sponsors (22)
The bill shifts tax burdens and tightens reporting to increase revenue and reduce avoidance by wealthy taxpayers, but does so at the cost of liquidity risks for asset‑rich taxpayers and materially higher compliance and administrative burdens for taxpayers, businesses, and financial institutions.
High‑income and high‑net‑worth taxpayers would be taxed sooner on unrealized gains and some estate‑transfer loopholes would be closed, increasing federal revenue and making the tax system more progressive.
Stricter anti‑avoidance rules (limits on borrowing‑against‑assets strategies, tighter expatriation/foreign‑trust rules, and 'applicable taxpayer' rules) reduce incentives and opportunities for complex tax avoidance, improving enforceability and perceived fairness.
New reporting requirements and visibility (e.g., reporting of large deferred compensation and life/annuity payments over $5M) give the IRS clearer information about big payments, helping enforcement and detection of tax base erosion.
Taxpayers with large unrealized gains (asset‑rich, cash‑poor) could owe annual taxes without liquid cash, forcing asset sales or new borrowing and creating financial strain or market disruptions.
The bill substantially increases valuation, reporting, and compliance complexity for taxpayers, owners of private businesses/partnerships, financial institutions, and the IRS, raising preparation costs and administrative burdens.
Limits on carrybacks and special carryback treatment (cannot create/increase NOL; carrybacks counted as long‑term capital losses for some computations) reduce the amount and timing of tax relief available to taxpayers who suffer losses, and may lower future loss‑sheltering capacity.
Based on analysis of 6 sections of legislative text.
Requires annual mark-to-market taxation of unrealized gains for certain wealthy taxpayers, closes estate-transfer loopholes, adjusts NIIT and expatriation rules, and adds special loss carryback rules.
Introduced September 17, 2025 by Ronald Lee Wyden · Last progress September 17, 2025
Imposes annual mark-to-market taxation on high-income and high-net-worth taxpayers so unrealized gains are taxed each year and common deferral strategies (often called “buy, borrow, die”) are limited or closed. It also tightens estate/transfer rules so heirs cannot sell inherited appreciated assets tax-free, creates limited carryback rules for net marked-to-market losses, and strengthens rules for the net investment income tax and expatriation for affected taxpayers. Most tax-related provisions apply to taxable years beginning after December 31, 2025.