This bill proposes to amend the Internal Revenue Code of 1986 to introduce inflation indexing for certain assets when determining capital gains or losses. The core purpose is to allow non-corporate taxpayers to adjust the cost basis of qualifying assets for inflation, thereby preventing inflation from artificially inflating taxable gains on long-held investments. This adjustment would apply to assets held for more than three years, substituting an "indexed basis" for the standard adjusted basis. An "indexed asset" encompasses common stock in C corporations (with specific foreign corporation exceptions), digital assets , and tangible property that qualifies as a capital asset or property used in a trade or business. The indexed basis is calculated by increasing the asset's adjusted basis by an "applicable inflation adjustment," which is derived from the percentage change in the Gross Domestic Product deflator between the asset's acquisition and disposition dates. Taxpayers must provide written documentation of the original purchase price for this indexing to be applied. The legislation includes detailed provisions for regulated investment companies and real estate investment trusts , allowing adjustments at the entity level and for interests held in the entity, with benefits generally not extended to corporate shareholders. Similarly, for partnerships, S corporations, and common trust funds, the inflation adjustment would pass through to partners, shareholders, or participants. However, the indexing does not affect depreciation, depletion, or amortization deductions, and it cannot create or increase an ordinary loss. Further rules address situations such as short sales, dispositions between related persons, and transfers made primarily to increase the indexing adjustment. Improvements to property or capital contributions are treated specially, with amounts of $1,000 or more considered separate indexed assets. These amendments are slated to apply to indexed assets acquired by taxpayers after December 31, 2025 , in taxable years ending after that date.