On October 1, Rep. Ralph Norman (R-SC) reintroduced his Capital Loss Inflation Fairness Act (HR 10690). The bill would raise the current capital loss deduction limit from $3,000 to $14,250. For married taxpayers filing separately the capital loss deduction would go up to $8,625, from $1,500. The bill would also index the deduction limit.

Under current law, losses that exceed the limit can be carried forward to future tax years. That would not change under HR 10690. The bill would apply to losses in tax years starting after December 31, 2025. The current limit has not been changed since 1978.

Prospects: Given the state of the federal debt and deficit, the competition from other high-priority issues, and the short time remaining in the 119^th Congress, it is unlikely this bill will get Congressional action this year. But it may attract a new sponsor (Rep. Norman is not running for reelection) next year. Then, though, it will face continued competition from other priority tax issues and a new mix of partisan political reactions. So, prospects for this legislation are dim, although enactment would not be impossible, depending on the circumstances in 2027-2028.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org