I 
117TH CONGRESS 
1ST SESSION H. R. 5838 
To amend the Internal Revenue Code of 1986 to provide for the indexing 
of certain assets for purposes of determining gain or loss. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 3, 2021 
Mr. DAVIDSON 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 provide 
for the indexing of certain assets for purposes of deter-
mining gain or loss. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Capital Gains Inflation 
Relief Act of 2021’’. 
SEC. 2. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
DETERMINING GAIN OR LOSS. 
(a) IN GENERAL.—Part II of subchapter O of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
basis rules of general application) is amended by redesig-
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nating section 1023 as section 1024 and by inserting after 
section 1022 the following new section: 
‘‘SEC. 1023. INDEXING OF CERTAIN ASSETS FOR PURPOSES 
OF DETERMINING GAIN OR LOSS. 
‘‘(a) GENERAL RULE.— 
‘‘(1) INDEXED
BASIS
SUBSTITUTED
FOR
AD-
JUSTED BASIS.—Solely for purposes of determining 
gain or loss on the sale or other disposition by a tax-
payer (other than a corporation) of an indexed asset 
which has been held for more than 3 years, the in-
dexed basis of the asset shall be substituted for its 
adjusted basis. 
‘‘(2) EXCEPTION
FOR
DEPRECIATION, ETC.— 
The deductions for depreciation, depletion, and am-
ortization shall be determined without regard to the 
application of paragraph (1) to the taxpayer or any 
other person. 
‘‘(3) WRITTEN
DOCUMENTATION
REQUIRE-
MENT.—Paragraph (1) shall apply only with respect 
to indexed assets for which the taxpayer has written 
documentation of the original purchase price paid or 
incurred by the taxpayer to acquire such asset. 
‘‘(b) INDEXED ASSET.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘indexed asset’ means— 
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‘‘(A) any common stock in a C corporation 
(other than a foreign corporation), 
‘‘(B) any digital asset, or 
‘‘(C) any tangible property, 
which is a capital asset or property used in the trade 
or business (as defined in section 1231(b)). 
‘‘(2) STOCK
IN
CERTAIN
FOREIGN
CORPORA-
TIONS INCLUDED.—For purposes of this section— 
‘‘(A) IN
GENERAL.—The term ‘indexed 
asset’ includes common stock in a foreign cor-
poration which is regularly traded on an estab-
lished securities market. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply to— 
‘‘(i) stock of a foreign investment 
company, 
‘‘(ii) stock in a passive foreign invest-
ment company (as defined in section 
1296), 
‘‘(iii) stock in a foreign corporation 
held by a United States person who meets 
the requirements of section 1248(a)(2), 
and 
‘‘(iv) stock in a foreign personal hold-
ing company. 
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