,,ii  #aai? ,,congress  #b;d ,session   
,s4 #dffb  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,june #b1 #bjbf,mr4    
,gallego introduc$ ! foll[+ bill2 :i* 0 
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to ensure t high  
net-wor? individuals _c avoid pay+ taxes
 on _! income & assets4  #a4 ,%ort title
 ,?is ,act may be cit$ z ! ,r$i/ribution
 ,( ,billions by ,in/itut+ ,new         
,high-income ,obligations on ,ov]look$  
,debt ,act ( #bjbf or ! ,,rob9hood ,act 
( #bjbf4  #b4 ,treatm5t ( loans = high  
net-wor? individuals  7a7 ,9 g5]al      
,sub*apt] ,p ( *apt] #a ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new "p3  ,,vii        
,treatm5t ( loans = applicable taxpay]s 
,sec4 #abii4 ,treatm5t ( loans =        
applicable taxpay]s4,sec4 #abii;,a4     
,applicable taxpay] def9$4,sec4         
#abii;,b4 ,t]ms & rules relat+ to cov]$ 
assets4  #abii4 ,treatm5t ( loans =     
applicable taxpay]s  7a7 ,9 g5]al ,9 !  

case ( any loan issu$ to an applicable  
taxpay]1 an am\nt ( long-t]m capital    
assets 7z id5tifi$ by ! applicable      
taxpay]7 held by ! applicable taxpay] = 
:i* ! long-t]m capital ga9 is equal to  
or great] ?an ! am\nt ( ! loan %all be  
treat$ z sold = _! fair m>ket value on !
 la/ day ( ! taxable ye> 9 :i* su* loan 
0 issu$4  7b7 ,adju/m5t ( basis  7#a7 ,9
 g5]al ,9 ! case ( any applicable       
taxpay] to :i* subsection 7a7 applies1  
su* taxpay] may increase ! basis ( any  
long-t]m capital asset held by su*      
taxpay] to ! ext5t ( ! ga9 recogniz$    
pursuant to subsection 7a7 ) respect to 
su* long-t]m capital asset1 provid$ t ! 
basis ( ! long-t]m capital asset does n 
exce$ ! fair m>ket value ( su* asset4   
7#b7 ,exception ,p>agraph 7#a7 %all n   
apply ) respect to any prop]ty ( a "*   
:i* is subject to ! all[ance =          
depreciation provid$ 9 section #afg1    
includ+ any prop]ty to :i* section #abca
 w\ld o!rwise apply4  7c7 ,treatm5t (   
long-,t]m capital ga9 ,= purposes (     

section #a7;h7 & det]m9+ net long-t]m   
capital ga91 ! am\nt ( any long-t]m     
capital ga9 f assets treat$ z sold      
pursuant to subsection 7a7 dur+ any     
taxable ye> may n be r$uc$ or (fset by  
any long-t]m capital losses = su*       
taxable ye>1 includ+ any losses c>ri$   
=w>d to su* taxable ye>4  7d7           
,long-,t]m capital asset  ,! t]m        
long-t]m capital asset means a capital  
asset held = m ?an #a ye>4  7e7 ,special
 rules  7#a7 ,nonresid5t ali5 ,9 ! case 
( any loan issu$ to an applicable       
taxpay] :o is a nonresid5t ali5         
individual1 subsection 7a7 %all apply ) 
respect to long-t]m capital assets 7z   
id5tifi$ by ! applicable taxpay]7 :i*   
are effectively connect$ ) ! conduct ( a
 trade or bus9ess )9 ! ,unit$ ,/ates4   
7#b7 ,citiz5s & resid5ts liv+ abroad ,! 
am\nt to :i* subsection 7a7 applies %all
 be r$uc$ by any am\nts exclud$ f !     
taxpay]'s gross income "u section #iaa4 
7f7 ,treatm5t ( leases  7#a7 ,9 g5]al ,=
 purposes ( ?is section1 9 ! case ( an  

applicable taxpay] t ent]s into a lease 
) respect to any prop]ty = :i* ! t]m is 
great] ?an #e ye>s-- 7,a7 su* lease %all
 be treat$ 9 ! same mann] z a loan issu$
 to su* taxpay]1 &  7,b7 = purposes ( ! 
application ( subsection 7a7-- 7i7 !    
fair m>ket value ( su* prop]ty on ! la/ 
day ( ! taxable ye> 9 :i* ! applicable  
taxpay] ent]$ into ! lease %all be      
treat$ z ! am\nt ( ! loan1 &  7ii7 !    
taxable ye> 9 :i* ! applicable taxpay]  
ent]$ into ! lease %all be treat$ z !   
taxable ye> 9 :i* ! loan 0 issu$4  7#b7 
,subsequ5t leases  7,a7 ,9 g5]al ,=     
purposes ( ?is subsection1 9 ! case ( an
 applicable taxpay] t ent]s into a lease
 ) respect to any prop]ty = a t]m ( n   
great] ?an #e ye>s 7ref]r$ to 9 ?is     
p>agraph z ! orig9al lease7 &-- 7i7     
subsequ5tly ext5ds ! t]m ( ! orig9al    
lease1 or  7ii7 ent]s into a lease = any
 t]m ) respect to any o!r prop]ty :i* is
 sub/antially id5tical to ! prop]ty "u !
 orig9al lease1  ! t]m ( ! orig9al lease
 %all include ! p]iod ( ! ext5sion      

describ$ 9 clause 7i7 or ! t]m ( ! lease
 describ$ 9 clause 7ii71 z applicable4  
7,b7 ,realization & valuation ,9 ! case 
( a lease to :i* subp>agraph 7,a7       
applies1 ! taxable ye> 9 :i* ! orig9al  
lease is ext5d$ 7z describ$ 9 clause 7i7
 ( su* subp>agraph7 or a lease is ent]$ 
into = prop]ty :i* is sub/antially      
id5tical 7z describ$ 9 clause 7ii7 ( su*
 subp>agraph71 z applicable1 %all be    
deem$ to be ! taxable ye> 9 :i* !       
applicable taxpay] ent]$ into ! lease = 
purposes ( p>agraph 7#a77;,b74  7g7     
,exi/+ loans ,9 ! case ( any loans :i* 7
 issu$ to an applicable taxpay] prior to
 ! date ( enactm5t ( ?is section-- 7#a7 
! total pr9cipal balance ( su* loans :i*
 is out/&+ z ( su* date %all be deem$ to
 be "o loan t 0 issu$ to ! applicable   
taxpay] on ,janu>y #a1 #bjbg1 &  7#b7 ! 
requirem5ts "u subsection 7i77#c77;,b7  
%all n apply4  7h7 ,non-,avoidance rules
  7#a7 ,9 g5]al ,9 ! case ( any loan    
issu$ to an applicable entity--  7,a7 ! 
loan %all be deem$ to h be5 issu$ to !  

own]s ( su* applicable entity on a pro  
rata basis1 &  7,b7 if any own] describ$
 9 subp>agraph 7,a7 is an applicable    
taxpay]1 subsection 7a7 %all apply )    
respect to su* taxpay]'s pro rata %>e ( 
su* loan4  7#b7  ,notification  ,n lat] 
?an #cj days aft] a loan describ$ 9     
p>agraph 7#a7 has be5 issu$1 !          
applicable entity %all provide notice to
 all own]s t--  7,a7 a loan has be5     
issu$ to ! applicable entity1 &  7,b7 ! 
am\nt ( su* loan & ! pro rata %>e t ea* 
own] has be5 assign$ pursuant to        
p>agraph 7#a77;,a74  7#c7  ,own]  7,a7  
,9 g5]al  ,! t]m own] means1 ) respect  
to any applicable entity1 a taxpay] :o  
owns 7or is consid]$ z own+ )9 ! mean+ (
 section #cah7 capital or pr(its int]e/s
 9 su* entity4  7,b7  ,con/ructive      
own]%ip rules  ,= purposes ( ?is        
subp>agraph1 own]%ip 9 su* entity %all  
be det]m9$ 9 accordance ) regulations   
prescrib$ by ! ,secret>y :i* %all be    
bas$ on pr9ciples simil> to ! pr9ciples 
( section #cah4  7#d7  ,c]ta9 leases  ,=

 purposes ( ?is subsection1 9 ! case (  
an applicable entity t ent]s into a     
lease1 subsection 7f7 %all n apply )    
respect to su* lease unless !           
transaction is 9 violation ( ! economic 
sub/ance doctr9e 7z describ$ 9 section  
#ggja7o774  7i7 ,regulations & guidance 
,! ,secret>y %all prescribe su* guidance
 & regulations z may be necess>y to c>ry
 out ! purposes ( ?is section1 includ+  
guidance & regulations-- 7#a7 to assi/  
taxpay]s 9 comply+ ) ! requirem5ts ( ?is
 section1  7#b7 t specifies requir$     
cont5t to be includ$ 9 ! notification "u
 subsection 7h77#b71 &  7#c7 to require 
report+ by-- 7,a7 any applicable taxpay]
 to :i* a loan 0 issu$1 &  7,b7 any     
entity t issues a loan to an applicable 
taxpay]4  #abii;,a4 ,applicable taxpay] 
def9$  7a7 ,9 g5]al ,= purposes ( ?is   
"p-- 7#a7 ,9 g5]al ,! t]m applicable    
taxpay] means1 ) respect to any taxable 
ye>1 any taxpay]-- 7,a7 :i* is an       
individual :o met ei!r ! income te/ (   
p>agraph 7#b7 or ! asset te/ ( p>agraph 

7#c7 = ea* ( ! #c imm$iately prec$+     
taxable ye>s 7includ+ taxable ye>s      
beg9n+ be=e ! date ( ! enactm5t ( ?is "p
 :i* are includ$ 9 any su*              
#c-taxable-ye> p]iod71 or  7,b7 :i* is--
 7i7 an applicable tru/1 or  7ii7 !     
e/ate ( an individual :o 0 an applicable
 taxpay] = any taxable ye> dur+ !       
#d-taxable-ye> p]iod end+ ) ! taxable   
ye> 9 :i* ! individual di$4  7#b7       
,income te/ ,! requirem5ts ( ?is        
p>agraph are met = any taxable ye> if ! 
applicable adju/$ gross income ( !      
taxpay] = ! taxable ye> exce$s          
#ajj1jjj1jjj 7#ej1jjj1jjj 9 ! case ( a  
m>ri$ individual fil+ sep>ately74  7#c7 
,asset te/  7,a7 ,9 g5]al ,! requirem5ts
 ( ?is p>agraph are met = any taxable   
ye> if ! aggregate applicable value (   
all tradable & nontradable cov]$ assets 
held by ! taxpay] z ( ! close ( !       
taxable ye> exce$s #a1jjj1jjj1jjj       
7#ejj1jjj1jjj 9 ! case ( a m>ri$        
individual fil+ sep>ately74  7,b7       
,treatm5t ( own]%ip int]e/s 9 applicable

 entities ,= purposes ( subp>agraph     
7,a71 any own]%ip int]e/ 9 an applicable
 entity :i* is-- 7i7 held directly 7or  
indirectly ?r\gh #a or m nontradable    
int]e/s7 by an applicable taxpay]1 &    
7ii7 a tradable or nontradable cov]$    
asset1  %all be treat$ 9 ! same mann] z 
any o!r tradable or nontradable cov]$   
asset4  7#d7 ,special rules relat+ to   
applicable taxpay] /atus  7,a7          
,t]m9ation ( /atus ( individual taxpay]s
 ,a taxpay] :o is treat$ z an applicable
 taxpay] "u p>agraph 7#a77;,a7 = any    
taxable ye> %all cont9ue to be s treat$ 
until ! fir/ taxable ye> ) respect to   
:i*-- 7i7 ! taxpay] does n1 = ea* ( ! #c
 taxable ye>s imm$iately prec$+ su*     
taxable ye>1 meet ei!r-- 7,i7 ! income  
te/ ( p>agraph 7#b7 9 effect = su*      
prec$+ taxable ye>1 or  7,,ii7 ! asset  
te/ ( p>agraph 7#c7 9 effect = su*      
prec$+ taxable ye>1  except t ea* su*   
p>agraph %all be appli$ = purposes ( ?is
 clause by sub/itut+ an am\nt equal to  
"o-half ( ! doll> am\nt o!rwise 9 effect

 = su* taxpay] "u su* p>agraph = ea* su*
 prec$+ taxable ye> = su* doll> am\nt1 &
  7ii7 ! taxpay] elects1 9 su* mann] &  
=m & at su* "t z ! ,secret>y may        
prescribe1 n to be s treat$ = su* fir/  
taxable ye>4  7,b7 ,e>li] t]m9ation     
election ( applicable taxpay] /atus =   
divorc$ individuals ,if-- 7i7 an        
applicable taxpay] ceases to be a m>ri$ 
individual by reason ( a decree (       
divorce or sep>ate ma9t5ance issu$ dur+ 
any taxable ye>1 &  7ii7 su* taxpay]1 = 
! fir/ taxable ye> foll[+ ! taxable ye> 
describ$ 9 clause 7i71 does n meet      
ei!r-- 7,i7 ! income te/ ( p>agraph     
7#b71 except t su* p>agraph %all be     
appli$ = purposes ( ?is subclause by    
sub/itut+ #a1jjj1jjj = ! doll> am\nt    
o!rwise 9 effect = su* taxpay] "u su*   
p>agraph1 or  7,,ii7 ! asset te/ (      
p>agraph 7#c71 except t su* p>agraph    
%all be appli$ = purposes ( ?is         
subclause by sub/itut+ #aj1jjj1jjj = !  
doll> am\nt o!rwise 9 effect = su*      
taxpay] "u su* p>agraph1  !n su* taxpay]

 may elect1 9 su* mann] & =m & at su* "t
 z ! ,secret>y may prescribe1 n to be   
treat$ z an applicable taxpay] beg9n+ ) 
su* fir/ taxable ye>4  7,c7 ,election   
,an election "u subp>agraph 7,a7 or     
7,b7-- 7i7 %all be made ) ! taxpay]'s   
return ( tax = ! taxable ye> to :i* su* 
election fir/ applies 7or su* o!r "t z !
 ,secret>y %all prescribe7 & %all be 9  
su* =m & mann] z ! ,secret>y may        
prescribe1 &  7ii7 %all apply to su*    
fir/ taxable ye> & all subsequ5t taxable
 ye>s until ! fir/ taxable ye> = :i* !  
taxpay] is aga9 treat$ z an applicable  
taxpay] by reason ( meet+ ! requirem5ts 
( p>agraph 7#a77;,a74  7#e7 ,special    
rules = m>ri$ individuals  7,a7         
,applicable taxpay]s becom+ m>ri$       
individuals ,if an individual 0 an      
applicable taxpay] = ! taxable ye> be=e 
! individual became a m>ri$ individual  
7)9 ! mean+ ( section #ggjc71 su*       
individual & ! individual's sp\se %all  
be treat$ z applicable taxpay]s = su*   
taxable ye> ( m>riage & subsequ5t       

taxable ye>s until su* /atus is o!rwise 
t]m9at$ "u ?is section4  7,b7 ,m>ri$    
individuals fil+ sep>ately ,if a m>ri$  
individual fil+ sep>ately is treat$ z an
 applicable taxpay] = any taxable ye>1  
su* individual's sp\se %all be treat$ z 
an applicable taxpay] = su* taxable ye>4
  7,c7 ,fir/-ye> elections ,"u rules    
prescrib$ by ! ,secret>y1 if an         
individual is fir/ treat$ z an          
applicable taxpay] = a taxable ye> by   
reason ( ! application ( subp>agraph    
7,a7 or 7,b71 section #dif %all apply to
 su* taxpay] = su* fir/ taxable ye> only
 ) respect to assets held sep>ately by  
su* individual unless su* taxable ye> is
 also ! fir/ taxable ye> = :i* !        
individual's sp\se is an applicable     
taxpay]4  7#f7 ,regulatory au?ority ,!  
,secret>y %all prescribe su* regulations
 & guidance z may be necess>y to c>ry   
out ! provisions ( ?is subsection1      
includ+-- 7,a7 rules waiv+ ! application
 ( p>agraph 7#e77;,b7 9 cases :]e !     
,secret>y det]m9es equitable relief is  

appropriate1  7,b7 rules provid+ = !    
application ( ?is subsection 9 cases :]e
 ! fil+ /atus ( a taxpay] *anges betwe5 
any taxable ye> & any ( ! #c imm$iately 
prec$+ taxable ye>s1 includ+ ! fir/     
taxable ye> 9 :i* a taxpay] files a jo9t
 return aft] becom+ m>ri$1 &  7,c7 rules
 requir+ su* in=mation report+ z !      
,secret>y det]m9es necess>y to det]m9e  
:e!r a taxpay] is an applicable taxpay]4
  7b7 ,applicable adju/$ gross income ,=
 purposes ( ?is section1 ! t]m          
applicable adju/$ gross income means    
modifi$ adju/$ gross income z def9$ 9   
section #cf;,b7d77#b77;,b71 except t--  
7#a7 clause 7i7 !re( %all be appli$ by  
sub/itut+ sections #iaa1 #ica1 & #icc = 
section #iaa1 &  7#b7 9 ! case ( a tru/1
 no d$uction "u section #fea or #ffa    
%all be all[$4  7c7 ,applicable tru/ ,= 
purposes ( ?is section-- 7#a7 ,9 g5]al  
,! t]m applicable tru/ means a tru/ 7o!r
 ?an a grantor tru/7 :i*1 = ea* ( ! #c  
taxable ye>s imm$iately prec$+ su*      
taxable ye> 7includ+ taxable ye>s beg9n+

 be=e ! date ( ! enactm5t ( ?is "p :i*  
are includ$ 9 any su* #c-taxable-ye>    
p]iod71 meets ei!r-- 7,a7 ! income te/ (
 subsection 7a77#b71 except t su*       
subsection %all be appli$ = purposes (  
?is subp>agraph by sub/itut+ #aj1jjj1jjj
 = ! doll> am\nt o!rwise 9 effect = su* 
taxable ye> "u su* p>agraph1 or  7,b7 ! 
asset te/ ( subsection 7a77#c71 except t
 su* subsection %all be appli$ =        
purposes ( ?is subp>agraph by sub/itut+ 
#ajj1jjj1jjj = ! doll> am\nt o!rwise 9  
effect = su* taxable ye> "u su*         
p>agraph4  7#b7 ,exceptions ,su* t]m    
%all n include-- 7,a7 a qualifi$        
disability tru/ 7z def9$ 9 section      
#fdb7;b77#b77;,c77ii771  7,b7 any       
portion ( a tru/ :i* consi/s ( prop]ty  
p]man5tly set aside = ! exclusive use ( 
an organization describ$ 9 section      
#agj7;c71  7,c7 a pool$ income fund 7z  
def9$ 9 section #fdb7;c77#e77 or a      
cemet]y p]petual c>e fund 7z describ$ 9 
section #fdb7;i771  7,d7 a settlem5t    
tru/ 7z def9$ 9 section #fdf71  7,e7 any

 *>itable rema9d] annuity tru/ 7z def9$ 
9 section #ffd71  7,f7 any *>itable     
rema9d] unitru/ 7z def9$ 9 section      
#ffd71 or  7,g7 any o!r category ( tru/ 
id5tifi$ 9 regulations or guidance      
provid$ by ! ,secret>y4  7#c7 ,grantor  
tru/s  7,a7 ,grantor tru/ def9$ ,=      
purposes ( ?is section1 ! t]m grantor   
tru/ means any portion ( a tru/ )       
respect to :i* ! grantor or any o!r     
p]son is consid]$ ! own] "u subp>t ,e ( 
"p ,i ( sub*apt] ,j4  7,b7 ,assets (    
grantor tru/ tak5 into acc\nt ,=        
purposes ( subsection 7a77#a77;,a71 !   
assets ( a grantor tru/ %all be includ$ 
9 ! assets (-- 7i7 ! grantor ( su* tru/ 
if ! grantor is consid]$ ! own] ( su*   
assets1 &  7ii7 if a p]son o!r ?an !    
grantor is consid]$ ! own] ( su* assets1
 bo? ! grantor & su* p]son4  7d7        
,special rules = =eign p]sons &         
expatriates ,= purposes ( ?is "p-- 7#a7 
,nonresid5t ali5 individuals ,! foll[+  
rules %all apply 9 det]m9+ :e!r a       
nonresid5t ali5 individual is an        

applicable taxpay]3 7,a7 ,income te/ ,= 
purposes ( ! income te/ "u subsection   
7a77#b7-- 7i7 su* subsection %all be    
appli$ = purposes ( ?is subp>agraph by  
sub/itut+ #ej1jjj1jjj = ! doll> am\nt   
o!rwise 9 effect = su* taxable ye> "u   
su* p>agraph1 &  7ii7 ! applicable      
adju/$ gross income ( su* individual    
%all be equal to ! taxable income ( su* 
individual1 det]m9$ by only tak+ into   
acc\nt items ( income1 ga91 d$uction1 & 
loss :i* are effectively connect$ ) !   
conduct ( trades or bus9esses )9 !      
,unit$ ,/ates4  7,b7 ,asset te/ ,=      
purposes ( ! asset te/ "u subsection    
7a77#c7-- 7i7 su* subsection %all be    
appli$ = purposes ( ?is subp>agraph by  
sub/itut+ #ejj1jjj1jjj = ! doll> am\nt  
o!rwise 9 effect = su* taxable ye> "u   
su* p>agraph1 &  7ii7 only assets :i*   
produce income describ$ 9 subp>agraph   
7,a7 %all be tak5 into acc\nt4  7#b7    
,expatriates  7,a7 ,9 g5]al ,if1 = !    
taxable ye> :i* includes a cov]$        
expatriate's expatriation date1 su*     

expatriate-- 7i7 0 an applicable taxpay]
 7)\t reg>d to ?is p>agraph71 or  7ii7  
is an applicable taxpay] "u ! rules (   
subp>agraph 7,b71  su* expatriate %all  
be treat$ z an applicable taxpay] dur+  
ea* ( ! taxable ye>s dur+ !             
#aj-taxable-ye> p]iod beg9n+ ) su*      
taxable ye> 7& su* /atus %all n be      
t]m9at$ dur+ su* p]iod by reason ( any  
o!r provision ( ?is "p74  7,b7 ,special 
rules = det]m9+ /atus ,= purposes (     
subp>agraph 7,a77ii71 a cov]$ expatriate
 n o!rwise treat$ z an applicable       
taxpay] %all be treat$ z an applicable  
taxpay] if1 dur+ any ( ! #e taxable ye>s
 imm$iately prec$+ ! taxable ye> :i*    
includes ! cov]$ expatriate's           
expatriation date 7includ+ taxable ye>s 
beg9n+ be=e ! date ( ! enactm5t ( ?is "p
 :i* are includ$ 9 any su*              
#e-taxable-ye> p]iod71 ! expatriate     
meets ei!r-- 7i7 ! income te/ (         
subsection 7a77#b71 except t su*        
subsection %all be appli$ = purposes (  
?is subp>agraph by sub/itut+ #ej1jjj1jjj

 = ! doll> am\nt o!rwise 9 effect = su* 
taxable ye> "u su* p>agraph1 or  7ii7 ! 
asset te/ ( subsection 7a77#c71 except t
 su* subsection %all be appli$ =        
purposes ( ?is subp>agraph by sub/itut+ 
#ejj1jjj1jjj = ! doll> am\nt o!rwise 9  
effect = su* taxable ye> "u su*         
p>agraph4  7,c7 ,def9itions ,any t]m us$
 9 ?is p>agraph :i* is also us$ 9       
section #hgg;,a %all h ! same mean+ z :5
 us$ 9 su* section4  #abii;,b4 ,t]ms &  
rules relat+ to cov]$ assets  7a7 ,cov]$
 asset ,= purposes ( ?is "p1 ! t]m cov]$
 asset means any tradable cov]$ asset & 
any nontradable cov]$ asset4  7b7       
,tradable cov]$ asset ,= purposes ( ?is 
"p1 ! t]m tradable cov]$ asset means--  
7#a7 any asset if-- 7,a7 int]e/s 9 su*  
asset are trad$ on an e/abli%$          
securities m>ket1  7,b7 int]e/s 9 su*   
assets are readily tradable on a        
second>y m>ket 7or ! sub/antial         
equival5t !re(71  7,c7 int]e/s 9 su*    
assets are available on an onl9e or     
electronic plat=m t regul>ly mat*es1 or 

facilitates ! mat*+ (1 buy]s & sell]s ( 
su* assets1 or  7,d7 su* asset is an    
asset = :i* ! ,secret>y det]m9es !re is 
a reasonable basis to det]m9e ! asset's 
fair m>ket value annually1 &  7#b7 any  
d]ivative ) respect to an und]ly+       
inve/m5t :i*-- 7,a7 is an asset describ$
 9 p>agraph 7#a71 or  7,b7 is a         
nontradable cov]$ asset :i* is id5tifi$ 
9 regulations or o!r guidance provid$ by
 ! ,secret>y4  7c7 ,nontradable cov]$   
asset ,= purposes ( ?is "p-- 7#a7 ,9    
g5]al ,! t]m nontradable cov]$ asset    
means any asset :i* is n a tradable     
cov]$ asset1 includ+-- 7,a7 any int]e/ (
 ! taxpay] 9 an applicable sav+s plan or
 9 a def9$ b5efit plan1  7,b7 any ca% or
 ca% equival5t1 or  7,c7 any private    
placem5t life insurance or annuity      
contract describ$ 9 section             
#gb7;e77#ab77;,d74  7#b7 ,inve/m5ts 9   
qualifi$ opportunity funds ,not)/&+     
subsection 7b71 any inve/m5t 9 a        
qualifi$ opportunity fund 7z def9$ 9    
section #adjj,z-#b7;d77 %all be treat$ z

 a nontradable cov]$ asset4  7d7        
,applicable value ,= purposes ( ?is "p--
 7#a7 ,tradable cov]$ assets ,!         
applicable value ( any tradable cov]$   
asset z ( any date %all be its fair     
m>ket value on su* date4  7#b7          
,nontradable cov]$ assets ,! applicable 
value ( any nontradable cov]$ asset z ( 
any date %all be ! greate/ (-- 7,a7 !   
orig9al co/ basis ( su* asset1  7,b7 !  
adju/$ basis ( su* asset1  7,c7 ! value 
det]m9$ z ( ! date ( ! la/ ev5t )       
respect to ! asset :i* e/abli%es su*    
value1  7,d7 9 ! case ( an asset ! value
 ( :i* is includ$ 9 an applicable       
f9ancial /atem5t1 ! value 9 ! late/     
available /atem5t1  7,e7 ! value ( su*  
asset det]m9$ = purposes ( us+ su* asset
 to secure any indebt$ness1 &  7,f7 !   
value ( su* asset det]m9$ "u su* o!r    
valuation me?od z ! ,secret>y may       
prescribe4  ,if a cov]$ asset w\ld1 b = 
subsection 7c77#b7 or any o!r provision 
( ?is "p1 be treat$ z a tradable cov]$  
asset1 ! asset's applicable value %all  

be det]m9$ "u p>agraph 7#a74  7#c7      
,adju/m5t = debt & o!r liabilities ( !  
taxpay] ,except z provid$ by !          
,secret>y1 ! aggregate applicable value 
( all cov]$ assets ( ! taxpay] z ( any  
date 7det]m9$ )\t reg>d to ?is p>agraph7
 %all be r$uc$ by ! aggregate out/&+    
am\nt (-- 7,a7 indebt$ness ( ! taxpay] z
 ( su* date1 &  7,b7 any o!r liabilities
 7o!r ?an indebt$ness7 ( ! taxpay] z (  
su* date :i* ! ,secret>y det]m9es are   
appropriate to be tak5 into acc\nt = su*
 purpose4  7#d7 ,reliance on valuation  
,9 det]m9+ ! applicable value ( any     
tradable cov]$ asset = purposes ( ?is   
section1 ! taxpay] may rely on a        
valuation :i* is-- 7,a7 provid$ to !    
taxpay] by a brok] "u section #fjde7;b71
  7,b7 provid$ to ! taxpay] by a deal] 9
 securities or a deal] 9 commodities1 )9
 ! mean+ ( section #dge1  7,c7 det]m9$  
"u an applicable f9ancial /atem5t1 or   
7,d7 provid$ to ! taxpay] by su* o!r    
p]sons z may be designat$ by !          
,secret>y4  7#e7 ,private placem5t life 

insurance & annuity contracts  7,a7 ,9  
g5]al ,! applicable value ( a private   
placem5t life insurance or annuity      
contract 7z def9$ 9 section             
#gb7;e77#ab77;,d77 z ( any date %all be 
its ca% surr5d] value 7z det]m9$ "u     
section #ggjb7;f77#b77;,a77 on su* date4
  7,b7 ,adju/m5ts ,! ,secret>y %all by  
regulation provide = adju/m5ts to ! ca% 
surr5d] value det]m9$ "u subp>agraph    
7,a7 ) respect to any contract to !     
ext5t necess>y to prev5t ! avoidance ( !
 purposes ( ?is "p1 includ+ regulations 
:i* ensure t su* value z ( any "t       
prop]ly reflects ! value ( any und]ly+  
inve/m5ts ) respect to su* contract z ( 
su* "t4  7#f7 ,special rules =          
applicable entities ,9 ! case ( an      
applicable entity-- 7,a7 ! value ( a    
p>tn]'s own]%ip int]e/ 9 su* p>tn]%ip "u
 p>agraph 7#b77;,c7 %all n be less ?an !
 value ( ! p>tn]'s capital acc\nt "u    
section #gjd1 &  7,b7 ! ,secret>y %all  
provide rules = det]m9+ ! %>e ( a hold] 
( an own]%ip int]e/ 9 su* an entity (   

am\nts includ$ 9 an applicable f9ancial 
/atem5t ( su* entity = purposes ( apply+
 p>agraph 7#b77;,d74  7#g7 ,secret>ial  
au?ority ,! ,secret>y %all prescribe su*
 regulations1 rules1 & guidance z may be
 necess>y to c>ry out ! purposes ( ?is  
subsection1 includ+ regulations1 rules1 
& guidance :i*-- 7,a7 prev5t ! avoidance
 ( su* purposes1  7,b7 provide rules = !
 application ( p>agraph 7#b77;,c71      
includ+ 9 cases ( transactions 9 :i* ga9
 or loss is n recogniz$ 9 connection )  
contributions1 di/ributions1 & sales (  
sub/antially simil> prop]ty f :i* value 
may be d]iv$1 &  7,c7 provide rules =   
det]m9+ ! applicable value ( assets 9   
taxable ye>s beg9n+ be=e ! date ( !     
enactm5t ( ?is "p4  7e7 ,o!r def9itions 
,= purposes ( ?is "p-- 7#a7 ,applicable 
entity ,! t]m applicable entity means   
any-- 7,a7 p>tn]%ip1  7,b7 ,s           
corporation1 or  7,c7 o!r pass-?r\gh    
entity specifi$ 9 regulations or        
guidance prescrib$ by ! ,secret>y4  7#b7
 ,applicable f9ancial /atem5t ,=        

purposes ( ?is subsection1 ! t]m        
applicable f9ancial /atem5t has ! mean+ 
giv5 su* t]m by section #dea7;b77#c74   
7#c7 ,applicable sav+s plan ,! t]m      
applicable sav+s plan means-- 7,a7 a    
def9$ contribution plan to :i* section  
#dja7;a7 or #djc7;a7 applies1  7,b7 an  
annuity contract "u section #djc7;b71   
7,c7 an eligible def]r$ comp5sation plan
 describ$ 9 section #deg7;b7 :i* is     
ma9ta9$ by an eligible employ] describ$ 
9 section #deg7;e77#a77;,a71  7,d7 an   
individual retirem5t plan1  7,e7 an     
,ar*] ,,msa 7)9 ! mean+ ( section       
#bbj7;d771  7,f7 a qualifi$ tuition     
program 7z def9$ 9 section #ebi7;b771   
7,g7 an ,,able acc\nt 7z def9$ 9 section
 #ebi;,a7e77#f771  7,h7 a ,cov]dell     
education sav+s acc\nt 7z def9$ 9       
section #ecj71 or  7,i7 a heal? sav+s   
acc\nt 7)9 ! mean+ ( section #bbc7;d774 
7#d7 ,d]ivative ,! t]m d]ivative has !  
mean+ giv5 su* t]m "u section           
#ei;,a7h77#d74  7#e7 ,nontradable int]e/
 ,! t]m nontradable int]e/ means any    

own]%ip int]e/ 9 an applicable entity   
:i* is a nontradable cov]$ asset4  7#f7 
,und]ly+ inve/m5t ,! t]m und]ly+        
inve/m5t means1 ) respect to any        
d]ivative1 any item-- 7,a7 :i* is       
describ$ 9 clauses 7i7 ?r\gh 7v7 (      
section #ei;,a7h77#d77;,a7 7or any item 
sub/antially ! same z any su* item71 &  
7,b7 by ref]5ce to :i* ! value ( !      
d]ivative1 or any paym5t or o!r transf] 
) respect to ! d]ivative1 is det]m9$    
ei!r directly or indirectly4  4  7b7    
,cl]ical am5dm5t ,! table ( p>ts =      
sub*apt] ,p ( *apt] #a ( su* ,code is   
am5d$ by add+ at ! end ! foll[+ new     
item3  ,"p ,,vii--,treatm5t ( loans =   
applicable taxpay]s  4  7c7 ,effective  
date ,! am5dm5ts made by ?is section    
%all apply to taxable ye>s beg9n+ aft]  
,decemb] #ca1 #bjbf4