Sec. 30543. Exclusion of certain amounts of realized capital gain
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Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986, as amended by section 30521, is amended by inserting after section 139H the following new section: Gross income shall not include so much of the aggregate gain from transfers at death described in 1261(a) of any capital asset as does not exceed $100,000. In the case of qualified real property— subsection
(a)shall be applied separately to such qualified real property and other property, and in applying subsection
(a)to such qualified real property, the applicable amount shall be substituted for $100,000 . For purposes of subparagraph (A), the applicable amount is an amount equal to the sum of— $1,000,000, plus the excess (not less than zero) of the amount in effect under subsection
(a)over the aggregate amount of gain from transfers at death described in section 1261(a) of capital assets other than qualified real property. The Secretary shall, by regulations, provide for recapturing the benefit under any exclusion allowable under paragraph
(1)with respect to any qualified real property if, within 10 years after the decedent's death and before the death of the qualified heir— the qualified heir disposes of any interest in qualified real property (other than by a disposition to a member of his family), or the qualified heir ceases to use for the qualified use the qualified real property which was acquired (or passed) from the decedent. The benefit recaptured under subparagraph
(A)shall be recaptured from the qualified heir. Any term used in this subsection which is also used in section 2032A shall have the meaning given such term under section 2032A. In the case of any taxable year beginning after 2020, the $100,000 amount in subsection
(a)and the $1,000,000 in subsection (b)(1)(B)(i) shall each be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting in subparagraph (A)(ii) thereof calendar year 2019 for calendar year 2016 . If the dollar amount in subsection (a), after being increased under paragraph (1), is not a multiple of $10,000, such dollar amount shall be rounded to the next lowest multiple of $10,000. If the dollar amount in subsection (b)(1)(B)(i), after being increased under paragraph (1), is not a multiple of $100,000, such amount shall be rounded to the next lowest multiple of $100,000. . The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after section 139H the following new item: Sec. 139I. Exclusion gain from transfers of appreciated assets by gift or at death. . The amendments made by this section shall apply to taxable years beginning after December 31, 2019.