Capital Gains Inflation Relief Act of 2025

HR 1857, the Capital Gains Inflation Relief Act of 2025, would reduce taxable capital gains for individuals selling certain assets held over three years by adjusting the asset's original purchase price for inflation. It directly affects individual investors who sell qualifying assets like stocks (including foreign stocks traded on major exchanges), digital assets, or tangible property after holding them for more than three years. The bill replaces the standard adjusted basis with an "indexed basis" calculated using the GDP deflator to account for inflation between purchase and sale dates. This adjustment lowers the taxable gain amount without changing tax rates, though it includes specific rules for investment funds like REITs and mutual funds, and excludes assets held for less than three years or sold between related parties. The changes would apply to assets acquired after December 31, 2025.