Sponsors (17)
The bill narrows tax avoidance and protects many taxpayers below the $1,000,000 threshold (and certain family farms) but shifts substantial tax burden and compliance complexity onto high‑income filers, estates, heirs, and investors — trading broader fairness and revenue‑raising for increased administrative costs and liquidity pressures on some families and businesses.
Taxpayers with taxable income at or below $1,000,000 keep preferential (lower) capital gains and dividend tax treatment, protecting middle‑income and many upper‑middle households from higher tax rates.
Qualifying family farms and family-owned businesses receive targeted tax relief (special treatment, partial exclusion at death, and preserved like‑kind treatment for farming exchanges), helping preserve intergenerational family operations.
Beneficiaries inheriting appreciated assets can exclude up to $1,000,000 of net capital gain (with indexing after 2026), reducing tax owed on many inherited assets.
Taxpayers with taxable income above $1,000,000 lose preferential capital gains/dividend rates (and may face reduced QBI benefits), raising tax bills for high‑income households and potentially reducing investment incentives.
Eliminating the stepped‑up basis and taxing gifts/transfers (after 2025) means donors, estates, and heirs may face immediate or higher capital gains taxes at transfer or death, potentially forcing asset sales and reducing after‑tax inheritances.
The bill adds significant complexity, new certifications, long tracking windows (e.g., 120‑month rules), and reporting requirements that increase compliance costs and administrative burden for taxpayers, trustees, small businesses, farms, and the IRS.
Based on analysis of 8 sections of legislative text.
Restricts preferential capital gains/dividends to incomes ≤$1,000,000; treats gifts and inheritances as taxable sales with farm exceptions; adds reporting, installment payments, 1031 limits, and 199A changes.
Introduced September 11, 2025 by Delia Ramirez · Last progress September 11, 2025
Limits preferential long-term capital gains and qualified dividend rates to taxpayers with taxable incomes at or below $1,000,000, creates a broad "deemed sale" rule treating gifts and inheritances as taxable dispositions at fair market value (with limited exceptions and farm/business carve-outs), and adds reporting, payment installment, and anti‑avoidance rules. It also narrows like‑kind exchange deferral for most real estate, changes rules governing the 20% pass‑through deduction, and phases in special exclusions and certification/recapture rules for qualifying family farms or businesses.