Bill > SB3376

This bill, titled the "Extremely High Wealth Mark-to-Market Tax Act," mandates that resident taxpayers in Illinois with net assets of $1,000,000,000 or more must treat their assets as if they were sold at fair market value on December 31st of each taxable year, recognizing any gains or losses for tax purposes. This "mark-to-market" approach, which is a departure from taxing assets only when they are actually sold, aims to capture unrealized gains for taxation. The bill specifies how "assets" and "net assets" are defined, including assets held by spouses, minor children, or certain trusts, and also outlines how "fair market value" is to be determined, disregarding features intended to reduce an asset's value. For taxable years beginning in late 2026, only a portion of these gains, capped by a "phase-in cap amount" (25% of net assets exceeding $1 billion), will be subject to tax, with options for installment payments and a 7.5% annual deferral charge. For subsequent years, the full gains will be taxed, though net losses can be carried forward indefinitely. The bill also includes provisions for tax credits if gains were previously taxed in another state and makes conforming changes to the Illinois Income Tax Act to incorporate these new tax provisions, becoming effective immediately upon becoming law.

https://www.ilga.gov/Legislation/BillStatus?DocNum=3376&GAID=18&DocTypeID=SB&SessionID=114&GA=104