H.R. 5427, introduced in September 2025, imposes an annual "mark-to-market" tax on billionaires and high-net-worth individuals (those with over $100 million in annual income or $1 billion in covered assets) to prevent indefinite tax deferral through asset appreciation and borrowing strategies. The bill closes over 30 tax loopholes affecting like-kind exchanges, small business stock exclusions, and opportunity zone investments, and requires detailed annual reporting of asset valuations, pass-through entity gains, and deferred compensation for affected individuals. Key provisions take effect in 2026, with initial taxpayers allowed to spread their tax liability over five years, while the bill eliminates several longstanding tax benefits for billionaires, including favorable treatment of life insurance, capital gains on small business stock, and qualified opportunity fund investments. The legislation also imposes a 3.8 percent net investment tax on all investment income for applicable taxpayers regardless of total earnings and applies special tax rules to wealthy individuals who leave the country or engage in complex ownership structures.
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