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, includ-
ing 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. 
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 ‘‘Cutting Local Taxes 
by Reinstating SALT Act’’. 
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SEC. 2. REPEAL OF LIMITATION ON DEDUCTION FOR STATE 
AND LOCAL, ETC. TAXES. 
(a) IN GENERAL.—Section 164(b) of the Internal 
Revenue Code of 1986 is amended by striking paragraph 
(6) (as added by Public Law 115–97) and all that follows. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 3. STEP-UP IN BASIS OF PROPERTY ACQUIRED FROM 
DECEDENT LIMITED TO $5,000,000. 
(a) IN GENERAL.—Section 1014(a) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(a) IN GENERAL.—Except as otherwise provided in 
this section, the basis of property in the hands of a person 
acquiring the property from a decedent or to whom the 
property passed from a decedent shall, if not sold, ex-
changed, or otherwise disposed of before the decedent’s 
death by such person, be the lesser of— 
‘‘(1) the adjusted basis of the decedent, or 
‘‘(2) the fair market value of the property at 
the date of the decedent’s death.’’. 
(b) $5,000,000 BASIS INCREASE.—Section 1014 of 
such Code is amended by adding at the end the following 
new subsection: 
‘‘(g) $5,000,000 BASIS INCREASE.— 
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‘‘(1) IN GENERAL.—The basis of a decedent’s 
property to which subsection (a) applies shall be in-
creased by an amount equal to a portion of the ag-
gregate basis increase, which shall be allocated 
amongst property of the decedent in proportion to 
the net appreciation in value of the property. 
‘‘(2) AGGREGATE BASIS INCREASE.—For pur-
poses of this subsection, the aggregate basis increase 
shall be an amount equal to the lesser of— 
‘‘(A) $5,000,000, or 
‘‘(B) the aggregate net appreciation in 
value of all the decedent’s property to which 
subsection (a) applies. 
‘‘(3) NET APPRECIATION.—For purposes of this 
subsection, the net appreciation in value of any 
property is the amount by which (if any) the fair 
market value of the property exceeds the decedent’s 
adjusted basis as of the date of the decedent’s death. 
‘‘(4) SPECIAL
RULES
FOR
CERTAIN
PROP-
ERTY.—For purposes of determining net apprecia-
tion in value of property, in lieu of fair market 
value, the following shall be used: 
‘‘(A) In the case of an election under 
2032, the property value at the applicable valu-
ation date prescribed by such section. 
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‘‘(B) In the case of an election under sec-
tion 2032A, the property value determined 
under such section. 
‘‘(C) To the extent of the applicability of 
the exclusion described in section 2031(c), the 
basis in the hands of the decedent.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1014(d) of such Code is amended 
by striking ‘‘under subsection (a), such basis (deter-
mined before the application of this subsection)’’ and 
inserting ‘‘under this section (determined without re-
gard to this subsection), such basis’’. 
(2) Section 1014(e) of such Code is amended by 
inserting before the period at the end the following: 
‘‘and subsection (g) shall not apply to such prop-
erty’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to the estates of decedents dying 
after December 31, 2019. 
SEC. 4. TAX TREATMENT OF CONTRIBUTIONS OF PROP-
ERTY TO PRIVATE FOUNDATION. 
(a) IN GENERAL.—Part IV of subchapter P of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new section: 
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‘‘SEC. 1261. TREATMENT OF CONTRIBUTIONS OF PROPERTY 
TO PRIVATE FOUNDATION. 
‘‘(a) IN GENERAL.—Any property contributed by a 
taxpayer to a private foundation shall be treated for pur-
poses of this title as sold by the taxpayer on the date of 
such contribution for its fair market value. 
‘‘(b) DETERMINATION AND RECOGNITION OF GAIN 
AND LOSS.—In the case of any sale for the taxable year 
under subsection (a)— 
‘‘(1) this subchapter shall be applied separately 
with respect to all gains and losses from such sales, 
‘‘(2) losses shall be allowed only to the extent 
of gains, and 
‘‘(3) the tax imposed by this chapter for such 
taxable year shall not be less than the amount of 
such tax (determined without regard to this section) 
increased by an amount equal to the increase in 
such tax which would result solely from the inclusion 
of any net gain from all such sales. 
‘‘(c) COORDINATION WITH DEDUCTION.—No deduc-
tion shall be allowed under any other provision of this 
chapter by reason of any contribution to which subsection 
(a) applies.’’. 
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(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter P of such Code is amended by adding at 
the end the following new item: 
‘‘Sec. 1261. Treatment of contributions of property to private foundation.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions of property in tax-
able years beginning after December 31, 2019. 
Æ 
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