The ROBINHOOD Act of 2026 is designed to prevent high-income and wealthy individuals from avoiding taxes by taking large loans secured by their assets. The law applies to "applicable taxpayers"—individuals, trusts, or estates with either $100 million or more in annual income or $1 billion or more in assets for three consecutive years—and requires them to immediately recognize capital gains on long-term assets used as collateral or equal in value to loans they take out. The tax applies to loans to entities the taxpayer owns as well as long-term leases over five years, with anti-avoidance provisions extending the requirement to the taxpayer's proportional share of such loans. The bill provides detailed asset valuation rules distinguishing between tradable assets like stocks and nontradable assets like retirement accounts, with the Treasury Secretary given authority to establish additional valuation methods. These provisions take effect for tax years beginning after December 31, 2026, with wealthy individuals able to exit the applicable taxpayer classification once their income or assets drop to 50 percent of the threshold levels.
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