Sponsors (4)
The bill raises substantial revenue and narrows capital‑gain deferral opportunities—targeting wealthier taxpayers and certain exchanges—while protecting modest inheritors and family farms, but it also imposes higher taxes on wealthy investors and heirs and substantial new compliance, liquidity, and privacy burdens for estates, businesses, and taxpayers.
High‑income taxpayers and estates will generate more near‑term federal revenue because the bill curtails long‑standing capital‑gain deferral and preferential treatment (higher rates for certain gains, taxing transfers at death/gift, and limiting like‑kind deferral), which can fund public services or deficit reduction.
Taxpayers with taxable income at or below $1,000,000 keep the existing lower long‑term capital‑gain and qualified‑dividend rates, preserving benefits for many middle‑class investors and small business owners.
Heirs of family farms and qualifying family businesses receive targeted protection (larger exclusion above the $1,000,000 baseline and a 120‑month use requirement) that helps preserve farm/business continuity and eases intergenerational transfers.
Heirs, donors, and family‑owned businesses will face immediate tax liabilities because the bill generally removes indefinite step‑up/ carryover benefits, creating acute liquidity pressures that may force asset sales or debt‑financed payouts.
Taxpayers with income above $1,000,000 will pay higher tax rates on long‑term capital gains and qualified dividends, increasing tax bills and potentially reducing incentives for investment and capital formation.
New and expanded reporting, valuation, withholding, certification, and anti‑avoidance rules impose significant compliance, appraisal, legal, and preparer costs on taxpayers, estates, executors, fiduciaries, nonprofits, and state governments.
Based on analysis of 16 sections of legislative text.
Restricts preferential capital gains/dividend rates above $1M, taxes unrealized gains on most gifts/deaths with limited exclusions and reporting, caps 1031 deferrals, and narrows the QBI deduction.
Introduced March 17, 2026 by Edward John Markey · Last progress March 17, 2026
Limits preferential tax treatment for long-term capital gains and qualified dividends to taxpayers with taxable income at or below $1,000,000, creates a broad rule treating most gifts and transfers at death as taxable 'deemed realizations' of unrealized gains (with targeted exclusions and a new $1,000,000 exclusion for transfers at death and special family-farm relief), adds reporting and valuation rules for large inter vivos and testamentary transfers, allows multi-year installment payment of death-triggered capital gains with special interest rules, narrows like‑kind exchange deferrals, and tightens the pass‑through (QBI) deduction calculation. Most changes apply to taxable years beginning after December 31, 2026, with some inflation adjustments starting after 2027. The package creates new compliance obligations for donors, executors, trustees, and taxpayers; new valuation, withholding, and reporting rules for transfers; limits on deferral opportunities for real‑estate and business owners; and special transitional and hardship rules for qualifying family farms and businesses.