# 119-s-2094: Basis Shifting is a Rip-off Act

119-s-2094, Basis Shifting is a Rip-off Act, is a 119th Congress bill sponsored by Sen. Wyden, Ron [D-OR] (D-OR); status introduced; PRIA reads it as touching household money (as of 2025-12-21).

- Canonical: https://policyrisk.com/legislation/119-s-2094
- As of: 2025-12-21
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: 119-s-2094
- Congress: 119
- Title: Basis Shifting is a Rip-off Act
- Status: introduced
- Introduced: 2025-06-17
- Sponsor: Sen. Wyden, Ron [D-OR] (D-OR)
- Cosponsors: 0
- Policy area: Taxation
- Touches household money: yes
- Last recorded action: 2025-12-21

## Summary

**Tightens rules on basis-shifting in related-party partnership distributions.** This bill would change when partners and partnerships recognize gain or loss on transfers and distributions between related parties and raise penalties for related-party understatement. - Partners: Generally bars recognizing gain or loss on a distribution unless the money distributed exceeds the partner's adjusted basis immediately before the distribution. Any gain or loss that is recognized would be treated as gain or loss from the sale or exchange of the partner's partnership interest. - Partnerships: For related-party distributions that increase basis in distributed property the partnership would recognize gain equal to that basis increase and the distributed property's basis after the distribution would be increased accordingly. - Scope and enforcement: The bill defines "applicable partnerships," includes a small-business gross receipts exception, and creates a new 40% penalty for underpayments tied to related-party partnership distribution understatements. The rules would apply to distributions and transfers after June 11, 2025.

## Provisions PRIA read

- Higher taxes for related-party transfers: cost, high. If enacted, this bill would make many related-party partnership distributions and transfers create immediate taxable gain. Partners would generally recognize gain only when cash exceeds their basis, and losses would be limited to narrow liquidation cases. The bill would cap basis step-ups to the am…
- Higher penalty for related-party distributions: cost, medium. If enacted, the bill would add a new accuracy-related penalty for understatements tied to related-party partnership distributions. The penalty rate for the underpayment portion tied to those distributions would be 40 percent instead of 20 percent. This change would apply to distributions and transf…

## Related bills

- 119-s-891: Bipartisan Health Care Act
- 119-s-5071: Children's Safe Welcome Act of 2026
- 119-s-5022: Cannabis Administration and Opportunity Act
- 119-s-2819: Head Start for America's Children Act
- 119-s-4504: Full-Service Community School Expansion Act of 2026
- 119-s-3990: PrEP Access and Coverage Act of 2026

## Sources
- [119-s-2094 on Congress.gov](https://www.congress.gov/bill/119th-congress/senate-bill/2094)

## Related
- [119-s-891: Bipartisan Health Care Act](https://policyrisk.com/legislation/119-s-891)
- [119-s-5071: Children's Safe Welcome Act of 2026](https://policyrisk.com/legislation/119-s-5071)
- [119-s-5022: Cannabis Administration and Opportunity Act](https://policyrisk.com/legislation/119-s-5022)
- [119-s-2819: Head Start for America's Children Act](https://policyrisk.com/legislation/119-s-2819)
- [119-s-4504: Full-Service Community School Expansion Act of 2026](https://policyrisk.com/legislation/119-s-4504)
- [119-s-3990: PrEP Access and Coverage Act of 2026](https://policyrisk.com/legislation/119-s-3990)
- [All bills in Congress](https://policyrisk.com/legislation)

Source: PRIA, https://policyrisk.com/legislation/119-s-2094 (as of 2025-12-21).