Capital Gains Inflation Relief Act of 2025
Sponsored By: Senator Cruz, Ted [R-TX]
Introduced
Summary
This bill would index certain assets for inflation so non-corporate taxpayers pay tax on smaller, inflation-adjusted gains for long-held property. It substitutes an inflation-adjusted basis for assets held more than three years when calculating gain or loss.
Show full summary
- Individual investors and households could see lower taxable gains on long-term holdings like C corporation common stock, qualifying digital assets, and business property. The rule applies only when taxpayers have written documentation of the original purchase price and the holding period exceeds three years.
- Regulated investment companies (RICs) and real estate investment trusts (REITs) get entity-level indexing that flows through to owners. The bill builds exceptions and adjustments to limit or adjust benefits for corporate shareholders and to change how capital gain dividends are measured.
- Partnerships, S corporations, and common trust funds pass through indexing adjustments to partners and shareholders. The measure adds rules for transfers, section 754 elections, short sales, and applies to assets acquired after December 31, 2025.
Your PRIA Score
Personalized for You
How does this bill affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
Lower capital gains tax for long-term investors
If enacted, this bill would let non-corporate taxpayers who bought qualifying assets after December 31, 2025 and held them more than three years use an inflation-adjusted ("indexed") basis when computing taxable gain. The indexed basis increases your adjusted basis by the percent change in the GDP implicit price deflator between the quarter before you bought and the quarter before you sold, rounded to the nearest 0.1 percentage point. You must have written documentation of the original purchase price to claim indexing. Small additions under $1,000 in a year are ignored for indexing; additions $1,000 or more are treated as a separate asset acquired at year end. Indexing would be limited or suspended for related-person transfers, transactions that substantially reduce risk of loss, or transfers done mainly to increase indexing; special rules also apply to long short-sales and to non-dividend corporate distributions.
Indexing rules for funds and partners
If enacted, qualified investment entities (for example, mutual funds structured as RICs and REITs) could apply indexing at the entity level and pass indexing adjustments to investors. A fund counts indexed stock each quarter by a ratio of indexed assets to all assets: RICs use average month-end values; REITs use quarter-end values. If the ratio is at least 80% it is treated as 100%; if 20% or less it is treated as 0%. The bill would also pass indexing adjustments through partnerships, S corporations, and common trust funds and includes rules to stop corporations from getting a duplicate benefit. Depreciation, depletion, and amortization deductions are determined without regard to indexing, and certain tax computations for RIC/REIT qualification or built-in gains are not changed.
Sponsors & CoSponsors
Sponsor
Cruz, Ted [R-TX]
TX • R
Cosponsors
Sen. Tillis, Thomas [R-NC]
NC • R
Sponsored 2/27/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov