Bill > S798

This bill amends the Internal Revenue Code to create a new method for calculating capital gains tax that accounts for inflation, allowing individual taxpayers (but not corporations) to adjust the basis of certain assets when calculating gains or losses on sales. The bill defines "indexed assets" as including common stock in U.S. and some foreign corporations, digital assets, and tangible business or investment properties held for more than three years. When calculating the tax, taxpayers can increase the original purchase price of an asset by an inflation adjustment based on the change in the gross domestic product deflator between the quarter the asset was acquired and the quarter it was sold. The bill includes detailed provisions for how this indexing works for various types of investments, including regulated investment companies, real estate investment trusts, partnerships, and S corporations. Importantly, the indexing only applies to assets held for more than three years and requires written documentation of the original purchase price. The bill aims to prevent taxpayers from paying capital gains taxes on increases in asset value that are purely the result of inflation, thus providing tax relief for long-term investors. The provisions would take effect for assets acquired after December 31, 2025.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/798/all-info