Bill > HR5336

This bill proposes several significant changes to the tax treatment of capital gains and investment income. The bill would introduce new rules for how capital gains are taxed when assets are transferred through gifts or inheritance, effectively creating a deemed realization of capital gains at the time of transfer. It limits preferential tax rates for capital gains and dividends to taxpayers with incomes under $1,000,000 and introduces a new exclusion that allows individuals to avoid taxes on up to $1,000,000 of capital gains from transfers at death, with an additional 50% exclusion for qualifying family farms or businesses. The legislation also provides a 5-year installment payment option for capital gains taxes triggered by death, creates new information reporting requirements for gifts and bequests, and places limitations on like-kind exchanges and the deduction for qualified business income. These changes would primarily take effect for tax years beginning after December 31, 2025, and aim to create more equitable tax treatment between earned income and investment income by reducing some of the tax advantages currently available for capital gains.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/5336/all-info