Bill > HR1857

This bill provides tax relief for certain long-term asset investments by allowing taxpayers to adjust the cost basis of assets to account for inflation when calculating capital gains. Specifically, for assets held more than three years, taxpayers can increase the original purchase price by an inflation adjustment calculated using the gross domestic product deflator, which measures changes in the price of goods and services. The bill covers a wide range of assets, including common stocks in U.S. and some foreign corporations, digital assets, and tangible business or investment property. To claim this inflation adjustment, taxpayers must have written documentation of the original purchase price. The bill includes detailed rules for how this adjustment applies to different types of investments, such as regulated investment companies, real estate investment trusts, partnerships, and S corporations. There are also provisions to prevent abuse, such as disallowing the adjustment for transactions designed primarily to increase the inflation indexing benefit. The provisions would take effect for assets acquired after December 31, 2025, and aim to reduce the tax burden on long-term investments by accounting for the erosion of asset value due to inflation.