Title: Cutting Local Taxes by Reinstating SALT Act
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to repeal the limitation on individual deductions for certain state and local taxes. (For tax years 2018-2025, the deduction for certain state and local taxes is currently limited to $10,000 per year for individuals or $5,000 for married individuals filing a separate return.)
The bill also (1) limits the amount of the step-up in basis of property acquired from a decedent to $5 million, for estate tax purposes, and (2) treats property contributed by a taxpayer to a private foundation as sold by such taxpayer on the date of such contribution for its fair market value.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4274 Introduced in House (IH)]

<DOC>






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.

    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 ``Cutting Local Taxes by Reinstating 
SALT Act''.

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, exchanged, 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.--
            ``(1) In general.--The basis of a decedent's property to 
        which subsection (a) applies shall be increased by an amount 
        equal to a portion of the aggregate 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 purposes 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 property.--For purposes of 
        determining net appreciation 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 valuation date 
                prescribed by such section.
                    ``(B) In the case of an election under section 
                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 (determined before the 
        application of this subsection)'' and inserting ``under this 
        section (determined without regard 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 property''.
    (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 PROPERTY 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:

``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 purposes 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 deduction shall be allowed 
under any other provision of this chapter by reason of any contribution 
to which subsection (a) applies.''.
    (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 taxable years beginning after 
December 31, 2019.
                                 <all>