Sponsors (18)
The bill tightens tax deferral and transfer rules to raise revenue and limit indefinite tax avoidance while preserving limited exclusions and transitional relief for heirs and family farms, but it raises taxes on high‑income investors, creates liquidity and interest costs for estates, and substantially increases compliance complexity and uncertainty for taxpayers and the IRS.
Taxpayers with taxable income at or below $1,000,000 keep current, lower long‑term capital gains and dividend rates, preserving after‑tax investment returns for a large share of investors.
Recipients of gifts and inheritances get basis set to fair market value at transfer and standardized reporting to recipients/IRS (plus a 30‑year realization rule for certain trusts), simplifying future gain calculations, reducing long‑running carryover abuses, and improving tax fairness and compliance.
Heirs can exclude up to $1,000,000 of net capital gain on assets received at death (with an extra 50% exclusion and special treatment for qualifying family farms/businesses), and the $1,000,000 exclusion is indexed for inflation, lowering immediate tax burdens for many beneficiaries and helping farm/business continuity.
Taxpayers with taxable income above $1,000,000 lose preferential long‑term capital gains and dividend rates, increasing tax bills for high‑income investors and reducing after‑tax returns on significant investment income.
Many heirs and recipients face immediate taxable gain at transfer (deemed sales/basis changes), which can create steep, unexpected tax bills and liquidity problems—especially for seniors, heirs of illiquid small businesses, and family farms.
The bill significantly increases complexity, recordkeeping, reporting, and compliance work for taxpayers, executors, estate attorneys, tax preparers, and the IRS (including broad Treasury regulatory authority and some malformed numeric language that creates uncertainty).
Based on analysis of 8 sections of legislative text.
Limits preferential capital gains/dividend rates to incomes ≤ $1,000,000; imposes deemed realization at gift/death with a $1M (indexed) death exclusion, reporting, installment payment rules, 1031 caps, and QBI formula changes.
Official title: To amend the Internal Revenue Code of 1986 to equalize treatment of capital gains and earned income.
Introduced September 11, 2025 by Delia Ramirez · Last progress September 11, 2025
The bill reshapes the U.S. individual income tax rules for capital gains, gifts, and transfers at death: it limits preferential long‑term capital gains and qualified dividend rates to taxpayers with taxable incomes at or below $1,000,000, replaces carryover basis on most gifts with a fair‑market‑value step (deemed realization) at gift or death, creates a limited exclusion for capital gain on transfers at death, and adds new reporting, payment‑in‑installments, and anti‑avoidance rules. It also narrows like‑kind exchange (1031) tax deferral for most real property and changes how the qualified business income (QBI) rules treat non‑QBI income. Most provisions take effect for gifts, deaths, exchanges, or taxable years beginning after December 31, 2025. The bill adds detailed trust and spousal rules, reporting duties for donors/executors, interest and security rules for installment payments of gain at death, and recapture and hardship relief mechanics for family farm transfers that receive preferential treatment.