I 

116TH CONGRESS 

1ST SESSION H. R. 4274 

To amend the Internal Revenue Code of 1986 to repeal the limitation on 

the deduction for certain taxes, including State and local property and 

income taxes, to limit the step-up in basis allowed in the case of property 

acquired from a decedent, and to deem a sale on any contribution 

of property to a private foundation. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 10, 2019 

Mr. GOTTHEIMER (for himself and Mr. ZELDIN) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to repeal 

the limitation on the deduction for certain taxes, including State and local property and income taxes, to limit 

the step-up in basis allowed in the case of property 

acquired from a decedent, and to deem a sale on any 

contribution of property to a private foundation. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Cutting Local Taxes 

5 by Reinstating SALT Act’’. 


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1 SEC. 2. REPEAL OF LIMITATION ON DEDUCTION FOR STATE 

2 AND LOCAL, ETC. TAXES. 

3 (a) IN GENERAL.—Section 164(b) of the Internal 

4 Revenue Code of 1986 is amended by striking paragraph 

5 (6) (as added by Public Law 115–97) and all that follows. 

6 (b) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2017. 

9 SEC. 3. STEP-UP IN BASIS OF PROPERTY ACQUIRED FROM 

10 DECEDENT LIMITED TO $5,000,000. 

11 (a) IN GENERAL.—Section 1014(a) of the Internal 

12 Revenue Code of 1986 is amended to read as follows: 

13 ‘‘(a) IN GENERAL.—Except as otherwise provided in 

14 this section, the basis of property in the hands of a person 

15 acquiring the property from a decedent or to whom the 

16 property passed from a decedent shall, if not sold, ex17 changed, or otherwise disposed of before the decedent’s 

18 death by such person, be the lesser of— 

19 ‘‘(1) the adjusted basis of the decedent, or 

20 ‘‘(2) the fair market value of the property at 

21 the date of the decedent’s death.’’. 

22 (b) $5,000,000 BASIS INCREASE.—Section 1014 of 

23 such Code is amended by adding at the end the following 

24 new subsection: 

25 ‘‘(g) $5,000,000 BASIS INCREASE.— 


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1 ‘‘(1) IN GENERAL.—The basis of a decedent’s 

2 property to which subsection (a) applies shall be in3 creased by an amount equal to a portion of the ag4 gregate basis increase, which shall be allocated 

5 amongst property of the decedent in proportion to 

6 the net appreciation in value of the property. 

7 ‘‘(2) AGGREGATE BASIS INCREASE.—For pur8 poses of this subsection, the aggregate basis increase 

9 shall be an amount equal to the lesser of— 

10 ‘‘(A) $5,000,000, or 

11 ‘‘(B) the aggregate net appreciation in 

12 value of all the decedent’s property to which 

13 subsection (a) applies. 

14 ‘‘(3) NET APPRECIATION.—For purposes of this 

15 subsection, the net appreciation in value of any 

16 property is the amount by which (if any) the fair 

17 market value of the property exceeds the decedent’s 

18 adjusted basis as of the date of the decedent’s death. 

19 ‘‘(4) SPECIAL RULES FOR CERTAIN PROP20 ERTY.—For purposes of determining net apprecia21 tion in value of property, in lieu of fair market 

22 value, the following shall be used: 

23 ‘‘(A) In the case of an election under 

24 2032, the property value at the applicable valu25 ation date prescribed by such section. 


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1 ‘‘(B) In the case of an election under sec2 tion 2032A, the property value determined 

3 under such section. 

4 ‘‘(C) To the extent of the applicability of 

5 the exclusion described in section 2031(c), the 

6 basis in the hands of the decedent.’’. 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) Section 1014(d) of such Code is amended 

9 by striking ‘‘under subsection (a), such basis (deter10 mined before the application of this subsection)’’ and 

11 inserting ‘‘under this section (determined without re12 gard to this subsection), such basis’’. 

13 (2) Section 1014(e) of such Code is amended by 

14 inserting before the period at the end the following: 

15 ‘‘and subsection (g) shall not apply to such prop16 erty’’. 

17 (d) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to the estates of decedents dying 

19 after December 31, 2019. 

20 SEC. 4. TAX TREATMENT OF CONTRIBUTIONS OF PROP21 ERTY TO PRIVATE FOUNDATION. 

22 (a) IN GENERAL.—Part IV of subchapter P of the 

23 Internal Revenue Code of 1986 is amended by adding at 

24 the end the following new section: 


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1 ‘‘SEC. 1261. TREATMENT OF CONTRIBUTIONS OF PROPERTY 

2 TO PRIVATE FOUNDATION. 

3 ‘‘(a) IN GENERAL.—Any property contributed by a 

4 taxpayer to a private foundation shall be treated for pur5 poses of this title as sold by the taxpayer on the date of 

6 such contribution for its fair market value. 

7 ‘‘(b) DETERMINATION AND RECOGNITION OF GAIN

8 AND LOSS.—In the case of any sale for the taxable year 

9 under subsection (a)— 

10 ‘‘(1) this subchapter shall be applied separately 

11 with respect to all gains and losses from such sales, 

12 ‘‘(2) losses shall be allowed only to the extent 

13 of gains, and 

14 ‘‘(3) the tax imposed by this chapter for such 

15 taxable year shall not be less than the amount of 

16 such tax (determined without regard to this section) 

17 increased by an amount equal to the increase in 

18 such tax which would result solely from the inclusion 

19 of any net gain from all such sales. 

20 ‘‘(c) COORDINATION WITH DEDUCTION.—No deduc21 tion shall be allowed under any other provision of this 

22 chapter by reason of any contribution to which subsection 

23 (a) applies.’’. 


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1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for subchapter P of such Code is amended by adding at 

3 the end the following new item: 

‘‘Sec. 1261. Treatment of contributions of property to private foundation.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to contributions of property in tax6 able years beginning after December 31, 2019. 

Æ 


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