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Capital Gains Inflation Relief Act of 2023
12/15/2023, 4:07 PM
Summary of Bill S 1225
Bill 118 s 1225, also known as the Capital Gains Inflation Relief Act of 2023, is a piece of legislation currently being considered by the US Congress. The main purpose of this bill is to provide relief to individuals who have realized capital gains by adjusting the cost basis of their assets for inflation.
Under current tax law, individuals are required to pay taxes on the full amount of their capital gains, regardless of whether or not the gains are due to inflation. This can result in individuals paying taxes on gains that are not actually reflective of real economic growth.
The Capital Gains Inflation Relief Act of 2023 seeks to address this issue by allowing individuals to adjust the cost basis of their assets for inflation when calculating their capital gains. This would effectively reduce the amount of taxable gains, providing relief to individuals who have seen their assets appreciate in value over time due to inflation. Supporters of the bill argue that this change would help to promote investment and economic growth by reducing the tax burden on individuals who have made long-term investments. They also argue that it would help to make the tax code more fair and equitable by ensuring that individuals are not taxed on gains that are not reflective of real economic growth. Opponents of the bill, however, argue that it would primarily benefit wealthy individuals who hold large amounts of assets, and that it could result in a significant loss of tax revenue for the government. They also argue that it could complicate the tax code and make it more difficult to enforce. Overall, the Capital Gains Inflation Relief Act of 2023 is a complex piece of legislation that seeks to address the issue of taxing capital gains in a more equitable and fair manner. Its ultimate impact on the economy and government revenue remains to be seen, but it is likely to be a topic of debate and discussion in the coming months.
Under current tax law, individuals are required to pay taxes on the full amount of their capital gains, regardless of whether or not the gains are due to inflation. This can result in individuals paying taxes on gains that are not actually reflective of real economic growth.
The Capital Gains Inflation Relief Act of 2023 seeks to address this issue by allowing individuals to adjust the cost basis of their assets for inflation when calculating their capital gains. This would effectively reduce the amount of taxable gains, providing relief to individuals who have seen their assets appreciate in value over time due to inflation. Supporters of the bill argue that this change would help to promote investment and economic growth by reducing the tax burden on individuals who have made long-term investments. They also argue that it would help to make the tax code more fair and equitable by ensuring that individuals are not taxed on gains that are not reflective of real economic growth. Opponents of the bill, however, argue that it would primarily benefit wealthy individuals who hold large amounts of assets, and that it could result in a significant loss of tax revenue for the government. They also argue that it could complicate the tax code and make it more difficult to enforce. Overall, the Capital Gains Inflation Relief Act of 2023 is a complex piece of legislation that seeks to address the issue of taxing capital gains in a more equitable and fair manner. Its ultimate impact on the economy and government revenue remains to be seen, but it is likely to be a topic of debate and discussion in the coming months.
Congressional Summary of S 1225
Capital Gains Inflation Relief Act of 2023
This bill allows the adjusted basis of certain assets (including any common stock in a C corporation, any digital asset, and tangible property used in a trade or business) to be indexed for inflation for the purpose of determining the gain or loss of a taxpayer (other than a corporation) who has held the asset for more than three years.
The bill sets forth rules for applying the inflation adjustment to
- short sales;
- regulated investment companies;
- real estate investment trusts;
- other pass-through entities, including partnerships, S corporations, and common trust funds;
- dispositions between related persons; and
- improvements to property or contributions of capital.
The Internal Revenue Service may disallow an adjustment if any person transfers cash, debt, or any other property to another person for the principal purpose of securing or increasing the adjustment allowed by this bill.
Read the Full Bill
Current Status of Bill S 1225
Bill S 1225 is currently in the status of Bill Introduced since April 20, 2023. Bill S 1225 was introduced during Congress 118 and was introduced to the Senate on April 20, 2023. Bill S 1225's most recent activity was Read twice and referred to the Committee on Finance. as of April 20, 2023
Bipartisan Support of Bill S 1225
Total Number of Sponsors
1Democrat Sponsors
0Republican Sponsors
1Unaffiliated Sponsors
0Total Number of Cosponsors
4Democrat Cosponsors
0Republican Cosponsors
4Unaffiliated Cosponsors
0Policy Area and Potential Impact of Bill S 1225
Primary Policy Focus
TaxationAlternate Title(s) of Bill S 1225
Capital Gains Inflation Relief Act of 2023
Capital Gains Inflation Relief Act of 2023
A bill to amend the Internal Revenue Code of 1986 to provide for the indexing of certain assets for purposes of determining gain or loss.
Comments
Sponsors and Cosponsors of S 1225
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