# 119-hr-1857: Capital Gains Inflation Relief Act of 2025

119-hr-1857, Capital Gains Inflation Relief Act of 2025, is a 119th Congress bill sponsored by Rep. Davidson, Warren [R-OH-8] (R-OH); status introduced; PRIA reads it as touching household money (as of 2026-05-23).

- Canonical: https://policyrisk.com/legislation/119-hr-1857
- As of: 2026-05-23
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: 119-hr-1857
- Congress: 119
- Title: Capital Gains Inflation Relief Act of 2025
- Status: introduced
- Introduced: 2025-03-05
- Sponsor: Rep. Davidson, Warren [R-OH-8] (R-OH)
- Cosponsors: 0
- Policy area: Taxation
- Touches household money: yes
- Last recorded action: 2026-05-23

## Summary

**This bill would let long-term individual investors adjust an asset's tax basis for inflation when computing capital gains.** It targets non-corporate taxpayers who hold eligible assets more than three years and covers common stock, digital assets, and certain business property. - Non-corporate investors: Owners of indexed assets held more than three years could use an inflation-adjusted basis to lower reported capital gains. Taxpayers must keep written proof of the original purchase price and depreciation or amortization deductions are not recalculated. - Digital and foreign stock rules: "Digital asset" is defined as a native electronic asset on a cryptographically secured distributed ledger and may qualify. Foreign common stock traded on established markets can be indexed with exceptions for certain foreign companies, and American depository receipts follow the underlying stock. - Investment funds and pass-throughs: Regulated investment companies and REITs apply indexing at the entity level with quarterly ratio rules and 80%/20% thresholds for look-through treatment. Partnerships, S corporations, and common trust funds pass indexing adjustments to owners with special rules when a 754 election applies.

## Provisions PRIA read

- Inflation indexing for long-held assets: benefit, high. This bill would let non‑corporate taxpayers use an inflation‑indexed cost basis when they sell certain assets held more than 3 years. You would need written proof of the original purchase price. Covered assets include many U.S. stocks, some regularly traded foreign stocks, digital assets, and tangi…
- Indexing through mutual funds and REITs: benefit, medium. Mutual funds and REITs would compute indexing at the fund level and pass adjustments to investors. Each quarter, funds would measure how much of their assets qualify; 80% or more would count as 100%, and 20% or less would count as zero. The rules would look through fund partnerships and include saf…
- Inflation add-on for long short sales: cost, high. If a short sale stays open more than 3 years, the amount you realize would be increased by an inflation adjustment. The “buy” date would be the date you sold short, and the “sell” date would be when you close the short. The inflation change would use GDP deflators for the quarter before each date,…
- Guardrails and limits on indexing: mixed, medium. Indexing would pause during any period when you or a related person largely hedge away the risk of loss. Related‑person sales would generally not get indexing, and some corporate payouts that are not dividends would count as a sale; return‑of‑capital basis cuts would be applied to shares in the ord…

## Related bills

- 119-hr-3633: Digital Asset Market Clarity Act
- 119-hr-3330: Energy Freedom Act
- 119-hr-25: FairTax Act of 2025
- 119-hr-8324: Great American Healthcare Plan
- 119-hr-6955: Main Street Capital Access Act
- 119-hr-266: Educational Opportunity and Success Act of 2025

## Sources
- [119-hr-1857 on Congress.gov](https://www.congress.gov/bill/119th-congress/house-bill/1857)

## Related
- [119-hr-3633: Digital Asset Market Clarity Act](https://policyrisk.com/legislation/119-hr-3633)
- [119-hr-3330: Energy Freedom Act](https://policyrisk.com/legislation/119-hr-3330)
- [119-hr-25: FairTax Act of 2025](https://policyrisk.com/legislation/119-hr-25)
- [119-hr-8324: Great American Healthcare Plan](https://policyrisk.com/legislation/119-hr-8324)
- [119-hr-6955: Main Street Capital Access Act](https://policyrisk.com/legislation/119-hr-6955)
- [119-hr-266: Educational Opportunity and Success Act of 2025](https://policyrisk.com/legislation/119-hr-266)
- [All bills in Congress](https://policyrisk.com/legislation)

Source: PRIA, https://policyrisk.com/legislation/119-hr-1857 (as of 2026-05-23).