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.

Written by the Congressional Research Service, Library of Congress.