Billionaire Minimum Income Tax Act
Bill: H.R.8558 | Sponsor: Rep. Cohen, Steve (D-TN)
Policy area: Taxation

Summary:
Billionaire Minimum Income Tax Act
This bill imposes a minimum tax on individual taxpayers whose net worth for the taxable year exceeds $100 million. The tax is equal to 20% of the sum of a taxpayer's taxable income, plus net unrealized gains for the taxable year. The tax may not exceed 40% of the amount by which the taxpayer's net worth exceeds $100 million.

To amend the Internal Revenue Code of 1986 to impose a minimum tax on 
  certain wealthy taxpayers that takes into account unrealized gains.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Billionaire Minimum Income Tax 
Act''.

SEC. 2. MINIMUM TAX ON CERTAIN WEALTHY TAXPAYERS.

    (a) In General.--Subtitle A of the Internal Revenue Code of 1986 is 
amended by inserting after chapter 4 the following new chapter:

         ``CHAPTER 5--MINIMUM TAX ON CERTAIN WEALTHY TAXPAYERS

``Sec. 1481. Minimum tax on certain wealthy taxpayers.
``Sec. 1482. Certain otherwise exempt transfers by certain wealthy 
                            taxpayers treated as taxable.

``SEC. 1481. MINIMUM TAX ON CERTAIN WEALTHY TAXPAYERS.

    ``(a) In General.--In the case of an applicable taxpayer, there is 
hereby imposed (in addition to any other tax imposed by this subtitle) 
for each taxable year a tax equal to the excess (if any) of--
            ``(1) 20 percent of the sum of--
                    ``(A) the taxpayer's taxable income for such 
                taxable year, plus
                    ``(B) the taxpayer's net unrealized gain for such 
                taxable year, over
            ``(2) the sum of--
                    ``(A) the taxpayer's minimum tax account balance 
                for such taxable year, plus
                    ``(B) the taxpayer's regular tax liability (as 
                defined in section 26(b)) for such taxable year.
    ``(b) Limitation on Minimum Tax.--The tax imposed under subsection 
(a) with respect to any applicable taxpayer (other than an applicable 
taxpayer described in subsection (c)(1)(B)) for any taxable year shall 
not exceed 40 percent of the excess described in subsection (c)(1)(A) 
with respect to such taxpayer for such taxable year.
    ``(c) Applicable Taxpayer.--For purposes of this section--
            ``(1) In general.--The term `applicable taxpayer' means--
                    ``(A) any individual for any taxable year if the 
                taxpayer's net worth for such taxable year exceeds 
                $100,000,000 (half such amount in the case of a married 
                individual filing a separate return), and
                    ``(B) any trust or estate treated as an applicable 
                taxpayer under subsection (g).
            ``(2) Net worth.--The term `net worth' means, with respect 
        to any taxpayer for any taxable year, the excess (if any), 
        determined as of the close of such taxable year, of--
                    ``(A) the estimated value of all assets of the 
                taxpayer and all trust attributed assets of the 
                taxpayer, as determined under regulations provided by 
                the Secretary, over
                    ``(B) all debts (and such other liabilities as the 
                Secretary may provide) of the taxpayer and all trust 
                attributed debts of the taxpayer.
            ``(3) Trust attributed assets.--The term `trust attributed 
        assets' means, with respect to any taxpayer--
                    ``(A) any asset of a trust which such taxpayer is 
                treated as owning under subpart E of part I of 
                subchapter J of chapter 1, and
                    ``(B) any asset of a trust (other than a trust 
                which a person other than the taxpayer is treated as 
                owning under such subpart) that is distributable to the 
                taxpayer or from which income is distributable to the 
                taxpayer in whole or in part, whether or not the 
                taxpayer's distribution rights are subject to a 
                contingency, unless that contingency is the death of 
                another trust beneficiary.
            ``(4) Trust attributed debts.--The term `trust attributed 
        debts' means, with respect to any taxpayer--
                    ``(A) any debt (and such other liabilities as the 
                Secretary may provide) of a trust described in 
                paragraph (3)(A), and
                    ``(B) any debt (and such other liabilities as the 
                Secretary may provide) with respect to an asset 
                described in paragraph (3)(B) if the holders of such 
                debt have a right to repayment which is senior to the 
                distribution rights of the taxpayer.
            ``(5) Gratuitous transfers.--
                    ``(A) In general.--In the case of any asset which 
                was transferred by the taxpayer during the 5-year 
                period ending with the close of the taxable year for 
                which the taxpayer's net worth is determined (and which 
                is not otherwise taken into account in determining such 
                net worth), such taxpayer's net worth (as determined 
                for purposes of this section) shall be--
                            ``(i) increased by the value of such 
                        transferred asset at the time of transfer,
                            ``(ii) decreased (but not in excess of the 
                        amount of the increase under clause (i)) by the 
                        amount paid in consideration for such asset by 
                        the transferee,
                            ``(iii) in the case of any decrease under 
                        clause (ii), increased to the extent of any 
                        liability of the transferee to the transferor 
                        or related party (as defined under section 
                        267(b)) of the transferor, incurred in 
                        connection with the transfer of such asset, to 
                        the extent that the right to collect such 
                        liability is not already reflected in the net 
                        wealth of the transferor, and
                            ``(iv) increased by the value of any such 
                        transferred asset transferred with a purpose 
                        that was in substantial part to avoid tax, to 
                        the extent not already included as an increase 
                        under clause (i) or (iii).
                    ``(B) Exceptions.--Subparagraph (A) shall not apply 
                with respect to any transfer of an asset to--
                            ``(i) an organization described in section 
                        170(c),
                            ``(ii) a spouse or former spouse if section 
                        1041 applies to such transfer, or
                            ``(iii) a spouse if both spouses are 
                        applicable taxpayers at the time of such 
                        transfer.
                    ``(C) Special rule regarding transfer to avoid 
                tax.--For purposes of subparagraph (A)(iv), if one or 
                more transfers of assets would (but for this sentence) 
                reduce the tax imposed under this section and the 
                taxpayer retains a substantial degree of control over 
                such assets, the purpose of such transfers shall be 
                treated as avoidance of tax unless the taxpayer shows 
                otherwise by clear and convincing evidence.
    ``(d) Minimum Tax Account Balance.--For purposes of this section, 
the term `minimum tax account balance' means, with respect to any 
taxpayer for any taxable year, the excess (if any) of--
            ``(1) the aggregate amount of tax imposed under this 
        section with respect to the taxpayer for all prior taxable 
        years, over
            ``(2) the sum of--
                    ``(A) the aggregate credits allowed under sections 
                25E and 36C with respect to the taxpayer for all prior 
                taxable years, and
                    ``(B) the aggregate reductions described in 
                subsection (h)(6) with respect to the taxpayer for all 
                prior taxable years.
    ``(e) Net Unrealized Gain.--
            ``(1) In general.--For purposes of this section, the term 
        `net unrealized gain' means, with respect to any taxpayer for 
        any taxable year, the excess (if any) of--
                    ``(A) the aggregate gains which would be recognized 
                if such taxpayer sold each asset held at the close of 
                such taxable year (including any asset described in 
                subsection (c)(3)(A)) for such asset's estimated value 
                at such time, over
                    ``(B) the aggregate losses which would be so 
                recognized.
            ``(2) Estimated value.--For purposes of this section--
                    ``(A) In general.--Except as otherwise provided in 
                this subsection, the term `estimated value' means fair 
                market value determined in such manner as the Secretary 
                may provide.
                    ``(B) Non-readily tradable assets.--
                            ``(i) Default method.--In the absence of 
                        regulations or other guidance under clause 
                        (iii) or (iv) (and only in such absence), the 
                        estimated value of a non-readily tradable asset 
                        shall be determined by beginning with the 
                        greatest (determined after adjustment under 
                        clause (ii)) of--
                                    ``(I) the original basis amount,
                                    ``(II) the adjusted cost basis 
                                amount, or
                                    ``(III) the most recent fair market 
                                valuation amount.
                            ``(ii) Adjustment for deemed 
                        appreciation.--Each amount described in 
                        subclauses (I), (II), and (III) of clause (i) 
                        shall be separately increased by a rate of 
                        appreciation equal to the sum of--
                                    ``(I) the annual rate of interest 
                                determined by the Secretary to be 
                                equivalent to the average of the 5-year 
                                constant maturity Treasury yields, as 
                                published by the Board of Governors of 
                                the Federal Reserve System, for the 5-
                                year period ending on September 30 of 
                                the calendar year ending before the 
                                date with respect to which the 
                                estimated value is determined, plus
                                    ``(II) 2 percentage points,
                        for the period beginning on the date with 
                        respect to which such amount relates and ending 
                        on the date with respect to which the estimated 
                        value is determined.
                            ``(iii) Regulations.--In the case of any 
                        non-readily tradable asset, the estimated value 
                        of such asset shall be determined by such 
                        method as the Secretary may prescribe in 
                        regulations or other guidance. Such method may 
                        require a single valuation method with respect 
                        to any such asset or may provide one or more 
                        options for valuing any such asset and may (but 
                        is not required to) include one or more of the 
                        following:
                                    ``(I) Required formulaic valuations 
                                based on any of the original basis 
                                amount (grossed up by a formula), other 
                                adjusted cost basis amounts 
                                (potentially adjusted by a formula), 
                                most recent fair market valuation 
                                amount (grossed up by a formula), or 
                                formulaic multiple of book value or 
                                other financial statement valuation.
                                    ``(II) Any valuation method 
                                utilized with respect to illiquid 
                                taxpayers under subsection (f), 
                                including any method under the special 
                                valuation regime and the rule that a 
                                valuation may be challenged by the 
                                taxpayer only upon a showing of clear 
                                and convincing error.
                            ``(iv) Certain required applications of 
                        illiquid taxpayer rules.--The Secretary may 
                        issue regulations or other guidance which 
                        require certain taxpayers which hold one or 
                        more non-readily tradable assets to apply one 
                        or more of the rules applicable to illiquid 
                        taxpayers under paragraph (4) and subsection 
                        (h) (without regard to whether the taxpayer 
                        makes the election described in paragraph (4) 
                        or any election under subsection (h)) with 
                        respect to all or any portion of such assets. 
                        The Secretary may require calculation and 
                        payment of estimated annual taxes on such 
                        assets to the extent that the Secretary 
                        determines that doing so would best advance the 
                        goal of minimizing gaming by taxpayers.
                            ``(v) Recapture of depreciation and 
                        amortization permitted.--Nothing in this 
                        subsection shall be construed to prevent the 
                        determination of gains and losses for purposes 
                        of this subsection with respect to any asset on 
                        the basis of the adjusted basis of such asset 
                        (after taking into account any reductions in 
                        such basis for depreciation or amortization).
            ``(3) Non-readily tradable asset.--For purposes of this 
        section, the term `non-readily tradable asset' means any asset 
        which is part of any class of assets with respect to which the 
        Secretary has determined that mandatory annual valuations are 
        inappropriate for purposes of this section.
            ``(4) Illiquid taxpayers.--
                    ``(A) In general.--In the case of an illiquid 
                taxpayer which makes the election described in 
                subparagraph (B)--
                            ``(i) the net unrealized gain of such 
                        taxpayer shall be determined by only taking 
                        into account the unrealized gains (and losses) 
                        on assets other than non-readily tradable 
                        assets, and
                            ``(ii) such taxpayer shall be subject to 
                        the requirements of subsection (f) with respect 
                        to all non-readily tradable assets held by the 
                        taxpayer.
                    ``(B) Illiquid taxpayer.--For purposes of this 
                subsection, the term `illiquid taxpayer' means any 
                taxpayer for any taxable year if the estimated value of 
                all assets other than non-readily tradable assets of 
                the taxpayer as of the close of such taxable year does 
                not exceed 20 percent of the taxpayer's net worth for 
                such taxable year.
                    ``(C) Election.--Any election made under this 
                paragraph shall be made at such time and in such manner 
                as the Secretary may provide and, once made with 
                respect to any asset, may be revoked only with the 
                consent of the Secretary (and subject to such 
                requirements as the Secretary may provide to ensure 
                proper taxation of gains and losses with respect to 
                such assets). If the Secretary determines that it is 
                consistent with the purposes of this section, the 
                Secretary may permit an illiquid taxpayer to elect to 
                apply this paragraph (and subsection (f)) with respect 
                to such portion of non-readily tradable assets of the 
                taxpayer as the Secretary determines is consistent with 
                such purposes.
    ``(f) Unliquidated Tax Reserve Accounts.--
            ``(1) In general.--The Secretary shall issue regulations or 
        other guidance under which, in the case of any taxpayer subject 
        to the requirements of this subsection (including by reason of 
        subsection (e)(2)(B)(iv) or (e)(4) or paragraph (2)(K) of this 
        subsection), the taxpayer's tax liability under this section, 
        and the timing of any such liability, with respect to any non-
        readily tradable assets held by such taxpayer are determined on 
        the basis of the Unliquidated Tax Reserve Account rules 
        prescribed by the Secretary under this subsection.
            ``(2) Unliquidated tax reserve account rules.--The 
        Unliquidated Tax Reserve Account rules prescribed by the 
        Secretary under this subsection shall, except as otherwise 
        provided by the Secretary, be consistent with the following:
                    ``(A) Any taxpayer subject to this subsection shall 
                be treated as having an Unliquidated Tax Reserve 
                Account (hereafter in this subsection referred to as an 
                `ULTRA') which consists of the non-readily tradable 
                assets held by such taxpayer (or, as the case may be, 
                to the portion of such assets described in subsection 
                (e)(2)(B)(iv) or (e)(4)(C)) (hereafter in this 
                subsection referred to as the `ULTRA assets').
                    ``(B) Except as provided in subparagraph (K)--
                            ``(i) in the case of the first year in 
                        which a taxpayer becomes subject to this 
                        subsection and so has assets in the ULTRA, the 
                        notional interest percentage of the ULTRA shall 
                        be 20 percent (0 percent in the case of a 
                        taxpayer which elects to recognize all 
                        unrealized gains of all assets in the ULTRA 
                        upon initiation of the ULTRA), and
                            ``(ii) at the end of the first year in 
                        which a taxpayer becomes subject to this 
                        subsection and so has assets in the ULTRA and 
                        at the end of each subsequent year during which 
                        the taxpayer continues to be subject to this 
                        subsection and have assets in the ULTRA, the 
                        notional interest percentage of the ULTRA shall 
                        be increased annually by an amount equal to the 
                        product of--
                                    ``(I) the deemed rate of return 
                                multiplied by 20 percent, multiplied by
                                    ``(II) 1 minus the notional 
                                interest percentage immediately prior 
                                to the increase.
                    ``(C) The deemed rate of return for purposes of 
                subparagraph (B)(ii)(I) shall be the estimated 
                investment rate of return for the entire economy as 
                determined by the Secretary, or if the Secretary 
                provides that the notional interest percentage should 
                be determined separately with respect to any class of 
                assets, such other rate of return as the Secretary 
                determines appropriate for such asset class.
                    ``(D) Any sale, or other transfer, of any ULTRA 
                asset shall be treated as a distribution from the 
                ULTRA, except that the Secretary shall provide rules 
                for treating transfers made in the ordinary course of a 
                trade or business and exchanges of non-readily tradable 
                assets as other than distributions.
                    ``(E) Except as otherwise provided by the 
                Secretary, an increase in debt shall be treated as a 
                distribution from the ULTRA and any subsequent decrease 
                in debt shall be taken into account as a reduction in 
                distributions from the ULTRA or as a credit against tax 
                (as the Secretary determines appropriate).
                    ``(F) Any distribution from the ULTRA shall result 
                in an increase in the taxable income of the taxpayer 
                equal to the product of the estimated value of the 
                distribution multiplied by the notional interest 
                percentage at the time of the distribution.
                    ``(G) A taxpayer may elect to pay liabilities under 
                this subsection in advance and proper credit shall be 
                provided for any such liabilities so paid in advance 
                upon resolution of the ULTRA.
                    ``(H) The Secretary shall establish a special 
                valuation regime for purposes of determining the 
                estimated value of any distribution of a non-tradable 
                asset from an ULTRA. Such special valuation regime 
                shall ensure valuation accuracy, minimize the potential 
                for under-valuation, and minimize the potential for 
                taxpayer gaming. Such regime may include the use of 
                appraisers employed by the Secretary, formulaic 
                valuations, or any other method designed to ensure 
                valuation accuracy and minimize the potential for 
                gaming. Any estimated value determined under such 
                special valuation regime may be challenged by the 
                taxpayer only upon a showing of clear and convincing 
                error. In place of the standard due process safeguards, 
                a taxpayer may opt to reject such special valuations 
                (under rules and procedures to be determined by the 
                Secretary) and instead maintain the non-tradable asset 
                within an ULTRA.
                    ``(I) If a taxpayer is subject to the requirements 
                of this subsection with respect to any assets, such 
                taxpayer shall remain subject to the requirements of 
                this subsection (without regard to whether or not such 
                taxpayer ceases to be an applicable taxpayer) until the 
                ULTRA is resolved and all liabilities with respect to 
                such ULTRA have been paid. For purposes of this 
                subsection, an ULTRA shall be treated as resolved upon 
                the death of the taxpayer, the distribution of all 
                assets of the ULTRA, a determination by the Secretary 
                that further treatment as an ULTRA is inconsistent with 
                the purposes of this section, or a determination by the 
                Secretary described in subparagraph (J).
                    ``(J) If the Secretary determines, upon application 
                by the taxpayer, that the resolution of an ULTRA is not 
                inconsistent with the purposes of this section--
                            ``(i) all remaining assets of such ULTRA 
                        shall be treated as distributed, and
                            ``(ii) such ULTRA shall be treated as 
                        resolved.
                    ``(K) Upon the resolution of the ULTRA, there shall 
                be imposed on the taxpayer a tax (or a refund of taxes 
                previously paid may be awarded) as determined by the 
                Secretary by applying a retrospective formula 
                determined by the Secretary to eliminate the entire tax 
                advantage of deferral. Such tax shall be determined in 
                a manner to take into account prior distributions from 
                the ULTRA and any tax previously imposed thereon and 
                any liability under this subsection which is paid in 
                advance under subparagraph (G).
                    ``(L) If, upon the death of a taxpayer, an heir of 
                ULTRA assets elects to initiate a carry-over ULTRA for 
                such inherited assets--
                            ``(i) such assets shall not be taken into 
                        account under subparagraph (J) upon the 
                        resolution of the decedent's ULTRA,
                            ``(ii) such heir's carry-over ULTRA shall 
                        begin with a notional interest percentage equal 
                        to that of the decedent's ULTRA at the time of 
                        death, and
                            ``(iii) such carry-over ULTRA shall be 
                        maintained separately from any ULTRA otherwise 
                        maintained by such heir.
    ``(g) Treatment of Trusts and Estates as Applicable Taxpayers.--For 
purposes of this chapter--
            ``(1) In general.--Any trust (other than a trust the assets 
        of which are treated as owned by another taxpayer under subpart 
        E of part I of subchapter J of chapter 1) or applicable estate 
        shall be treated as an applicable taxpayer for purposes of this 
        chapter if any assets of the trust are trust attributed assets 
        with respect to any applicable taxpayer.
            ``(2) Applicable estate.--An estate is an applicable estate 
        beginning with the third taxable year following the date of 
        death of the decedent if the decedent was an applicable 
        taxpayer for any taxable year ending during the 5-year period 
        ending on the date of the decedent's death.
            ``(3) Trusts acquiring united states beneficiaries.--
                    ``(A) In general.--If paragraph (1) applies to a 
                trust for a transferor or beneficiary's taxable year, 
                and paragraph (1) would have applied to the trust for 
                any of the preceding 10 taxable years (other than years 
                prior to the effective date of this section) but for 
                the fact that in such year or years there was no United 
                States beneficiary for any portion of the trust, then 
                the transferor shall be treated as having income for 
                the taxable year equal to--
                            ``(i) the aggregate increases in the tax 
                        imposed under this title for each such prior 
                        taxable year (beginning after the date of the 
                        enactment of this chapter) which would have 
                        occurred if paragraph (1) had applied to such 
                        trust for such year, plus
                            ``(ii) interest on such increase determined 
                        with respect to each such taxable year 
                        determined at the underpayment rate.
                    ``(B) No living transferor.--In the event that 
                subparagraph (A) would apply, but for the fact that 
                there is no living transferor, then each beneficiary of 
                such trust, other than a contingent beneficiary, shall 
                be treated as having income for the taxable year equal 
                to--
                            ``(i) the aggregate increases in the tax 
                        imposed under this title for each such prior 
                        taxable year (beginning after the date of the 
                        enactment of this chapter) which would have 
                        occurred if paragraph (1) had applied to such 
                        trust, but only to the extent of such increases 
                        in tax which would have occurred with respect 
                        to such portion of trust assets as are 
                        distributable to the beneficiary, or such 
                        portion of trust income as is distributable to 
                        the beneficiary (whether or not such assets or 
                        income are so distributed), plus
                            ``(ii) interest on such increase determined 
                        with respect to each such taxable year 
                        determined at the underpayment rate.
                    ``(C) Contingent beneficiaries.--In the event that 
                no tax is imposed on a beneficiary under subparagraph 
                (B) because such beneficiary is contingent, then in the 
                first taxable year in which such beneficiary is no 
                longer contingent, such beneficiary shall be treated as 
                having income for the taxable year equal to the amount 
                that would have been imposed under subparagraph (B), 
                plus interest on such increase determined with respect 
                to each such taxable year determined at the 
                underpayment rate, but in no case will such tax and 
                interest be imposed with respect to any portion of 
                trust assets or income previously subject to tax under 
                this section.
                    ``(D) Contingent.--For purposes of this paragraph, 
                a beneficiary's interest in a trust shall be treated as 
                contingent if (and only if) such interest depends on 
                the outcome of uncertain future events (other than the 
                discretion of the trustee to determine the timing of 
                the distribution of income).
    ``(h) Election To Pay Liability in Installments.--
            ``(1) In general.--A taxpayer may elect to pay the tax 
        imposed under subsection (a) or (g) for any taxable year in 5 
        equal annual installments (in the case of the taxpayer's first 
        taxable year beginning in 2023, 9 equal annual installments).
            ``(2) Date for payment of installments.--If an election is 
        made under paragraph (1), the first installment shall be paid 
        on or before the due date (determined without regard to any 
        extension of time for filing the return) for the return of tax 
        for the taxable year described in subsection (a) and each 
        succeeding installment shall be paid on or before the due date 
        (as so determined) for the return of tax for the taxable year 
        following the taxable year with respect to which the preceding 
        installment was made.
            ``(3) Acceleration of payment.--
                    ``(A) In general.--If there is an addition to tax 
                for failure to timely pay any installment required 
                under this subsection (other than by reason of a timely 
                election made under paragraph (5)), a bankruptcy of the 
                taxpayer (including in a title 11 or similar case), or 
                any similar circumstance, then the unpaid portion of 
                all remaining installments shall be due on the date of 
                such event (or in the case of a title 11 or similar 
                case, the day before the petition is filed).
                    ``(B) Payment within 6 months.--In the case of the 
                payment of any installment required under this 
                subsection during the 6-month period beginning on the 
                due date of such installment, subparagraph (A) shall 
                not apply and rules similar to the rules of section 
                6166(g)(3)(B) shall apply.
            ``(4) Proration of deficiency to installments.--If an 
        election is made under paragraph (1) to pay tax imposed under 
        subsection (a) in installments and a deficiency has been 
        assessed with respect to such tax, the deficiency shall be 
        prorated to the installments payable under paragraph (1). The 
        part of the deficiency so prorated to any installment the date 
        for payment of which has not arrived shall be collected at the 
        same time as, and as a part of, such installment. The part of 
        the deficiency so prorated to any installment the date for 
        payment of which has arrived shall be paid upon notice and 
        demand from the Secretary. This subsection shall not apply if 
        the deficiency is due to negligence, to intentional disregard 
        of rules and regulations, or to fraud with intent to evade tax.
            ``(5) Election.--Any election under paragraph (1) shall be 
        made at such time and in such manner as the Secretary shall 
        provide.
            ``(6) Reduction of installment payments to extent minimum 
        account balance is in excess of expected recognized gain.--If 
        the minimum account balance of the taxpayer for any taxable 
        year (reduced by the amount of any credit allowed under section 
        25E for such taxable year) exceeds 20 percent of the taxpayer's 
        net unrealized gain for such taxable year, such excess shall be 
        applied to reduce the amount of any installment payments of the 
        taxpayer the date for payment of which has not yet arrived 
        (without regard to the taxable year to which such installment 
        payment relates). Any reduction under the preceding sentence 
        shall be applied to installment payments on a last-due, first-
        reduced basis.
    ``(i) Information Reporting.--The Secretary shall, not later than 1 
year after the date of the enactment of this section, issue 
regulations--
            ``(1) requiring such persons as the Secretary determines 
        appropriate to file a return with the Secretary which include 
        such information as the Secretary determines necessary to carry 
        out this section, including the provision of applicable 
        financial statements (within the meaning of section 451(b)), 
        other financial or accounting statements, insurance valuations, 
        or similar documents, and
            ``(2) requiring persons required to file returns under 
        paragraph (1) to furnish statements to such other persons as 
        the Secretary determines appropriate which contain all or a 
        portion of the information contained in such return.
    ``(j) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes this section and sections 25E and 36C, including regulations 
or other guidance to--
            ``(1) require reporting of basis and estimated value of 
        assets, aggregated by asset class or otherwise, held by the 
        applicable taxpayer, and liabilities of the applicable 
        taxpayer, as of the close of the taxable year, in such manner 
        as the Secretary may provide,
            ``(2) discourage applicable taxpayers from inappropriately 
        converting assets into assets which are non-readily tradable 
        assets,
            ``(3) treat assets held directly or indirectly by the 
        applicable taxpayer as held by the applicable taxpayer,
            ``(4) in such circumstances as the Secretary determines 
        there is a reasonable risk of an intent to avoid tax, treat 
        assets owned or controlled by persons related to the applicable 
        taxpayer as owned by the applicable taxpayer,
            ``(5) provide for the application of such sections with 
        respect to married individuals, including rules with respect 
        to--
                    ``(A) individuals whose marital or joint return 
                filing status changes, and
                    ``(B) the transfer of an individual's minimum tax 
                account balance to the individual's spouse or otherwise 
                upon the death of such individual,
            ``(6) provide that the tax imposed under this section shall 
        not be taken into account in determining the amount of any 
        required payment of estimated tax or in satisfying the safe 
        harbor to avoid a penalty for the underpayment of estimated 
        tax, and
            ``(7) if the Secretary determines appropriate to carry out 
        the purposes of this section, provide for the separate 
        application of such sections with respect to different classes 
        of assets.
    ``(k) Standards for Making Certain Determinations.--For purposes of 
making any determination described in subsection (e)(2)(A), 
(e)(2)(B)(iii), (e)(3), (f)(2)(C), or (f)(2)(D), the Secretary shall 
balance the goals of ensuring valuation accuracy, minimizing the 
potential for taxpayer gaming, and avoiding unduly excessive compliance 
and administrative costs.

``SEC. 1482. CERTAIN OTHERWISE EXEMPT TRANSFERS BY CERTAIN WEALTHY 
              TAXPAYERS TREATED AS TAXABLE.

    ``(a) In General.--Notwithstanding any other provision of this 
title, in the case of any specified transfer by a covered taxpayer, 
gain shall be recognized by such covered taxpayer in an amount equal to 
the excess (if any) of the estimated value (as defined in section 
1481(e)(2)) of the property transferred over the adjusted basis of such 
property.
    ``(b) Specified Transfer.--For purposes of this section, the term 
`specified transfer' means any gift, charitable contribution, bequest, 
or other transfer upon death.
    ``(c) Covered Taxpayer.--For purposes of this section, the term 
`covered taxpayer' means, with respect to any taxable year, any 
taxpayer which is an applicable taxpayer for such taxable year or was 
an applicable taxpayer for any of the 10 taxable years immediately 
preceding such taxable year.
    ``(d) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance that 
provide for exceptions with respect to--
            ``(1) transfers which are de minimis or which otherwise do 
        not pose a risk of circumventing the purposes of this chapter, 
        and
            ``(2) taxpayers which do not pose such a risk.''.
    (b) Credit Against Taxes on Recognized Gains.--Subpart A of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after section 25D the following new section:

``SEC. 25E. MINIMUM TAX ON CERTAIN WEALTHY TAXPAYERS CREDITED AGAINST 
              RECOGNIZED GAINS.

    ``In the case of an individual (including any estate or trust), 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year an amount equal to the lesser of--
            ``(1) the taxpayer's minimum tax account balance (as 
        defined in section 1481) for such taxable year determined, in 
        the case of any tax imposed under section 1481 with respect to 
        which an election is made under such section to pay such tax in 
        installments, by only taking into account so much of such tax 
        as has been paid as of the close of such taxable year, and
            ``(2) the excess (if any) of--
                    ``(A) the taxpayer's regular tax (as defined in 
                section 26(b)) for such taxable year, over
                    ``(B) the amount which would be determined under 
                subparagraph (A) if the taxpayer did not recognize any 
                gain or loss for such taxable year.''.
    (c) Refund of Excess Minimum Tax on Certain Wealthy Taxpayers.--
Subpart C of part IV of subchapter A of chapter 1 of the Internal 
Revenue Code of 1986 is amended by inserting after section 36B the 
following new section:

``SEC. 36C. CREDIT FOR EXCESS MINIMUM TAX ON CERTAIN WEALTHY TAXPAYERS.

    ``In the case of an individual (including any estate or trust), 
there shall be allowed as a credit against the tax imposed by this 
subtitle for any taxable year an amount equal to the excess (if any) 
of--
            ``(1) the amount described in section 25E(1) for such 
        taxable year, over
            ``(2) the sum of--
                    ``(A) 20 percent of the taxpayer's net unrealized 
                gain (as defined in section 1481) for such taxable 
                year,
                    ``(B) the aggregate credits allowed under section 
                25E for such taxable year and all prior taxable years, 
                and
                    ``(C) the aggregate reductions determined under 
                section 1481(h)(6) for such taxable year and all prior 
                taxable years.''.
    (d) Penalties for Failure To Report.--
            (1) Returns.--Section 6724(d)(1)(D) of the Internal Revenue 
        Code of 1986 is amended by inserting ``1481(i)(1) or'' before 
        ``6055''.
            (2) Statements.--Section 6724(d)(2) of such Code is 
        amended--
                    (A) in subparagraph (II), by striking ``or'' at the 
                end,
                    (B) in the first subparagraph (JJ), by striking the 
                period at the end and inserting a comma,
                    (C) in the second subparagraph (JJ)--
                            (i) by redesignating such subparagraph as 
                        subparagraph (KK), and
                            (ii) by striking the period at the end and 
                        inserting ``, or'', and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(LL) section 1481(i)(2) (relating to statements 
                relating to minimum tax on certain wealthy 
                taxpayers).''.
    (e) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of the Internal Revenue Code of 
        1986 is amended by inserting ``36C,'' after ``36B,''.
            (2) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
            (3) The table of chapters for subtitle A of the Internal 
        Revenue Code of 1986 is amended by inserting after the item 
        relating to chapter 4 the following new item:

       ``Chapter 5. Minimum Tax on Certain Wealthy Taxpayers.''.

            (4) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 25D 
        the following new item:

``Sec. 25E. Minimum tax on certain wealthy taxpayers credited against 
                            recognized gains.''.
            (5) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36B 
        the following new item:

``Sec. 36C. Credit for excess minimum tax on certain wealthy 
                            taxpayers.''.
    (f) Sense of Congress Regarding State Residency Rules.--It is the 
sense of Congress that the taxation by the several States of extreme 
wealth is in the public interest and that silence on the part of 
Congress shall not be construed to impose any barrier to the use of 
reasonable residency rules, including such rules that apportion a tax 
on deemed sales or extreme wealth over no more than five years, by the 
several States or the District of Columbia.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>