H.R. 10690House119th Congress (2025-2027)In Committee

Capital Loss Inflation Fairness Act

To amend the Internal Revenue Code of 1986 to increase the limitation on capital losses and index the limitation to inflation.

AI-Generated Summary

Updated October 6, 2026 at 7:20 AM UTC

The Capital Loss Inflation Fairness Act would raise the amount of capital losses that individual (non‑corporate) taxpayers can deduct against ordinary income and would adjust that limit each year for inflation. The higher limit would apply to tax years beginning after December 31, 2025, and would affect all individual filers, including those filing separately.

Key Provisions

Increases the annual capital‑loss deduction limit to $14,250 for single filers (or $7,125 for married individuals filing separately), up from the current $3,000/$1,500 limit.
Indexes the new limit for inflation for any taxable year beginning after 2026, using the cost‑of‑living adjustment and rounding changes to the nearest $25.
Applies only to taxpayers who are not corporations; corporate rules remain unchanged.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

October 1, 2026

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HouseIntro Referral

Introduced in House

October 1, 2026

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

October 1, 2026

Bill Text

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Introduced in HouseIssued October 1, 2026

119th CONGRESS

2d Session

H. R. 10690

IN THE HOUSE OF REPRESENTATIVES

October 1, 2026

Mr. Norman (for himself, Mrs. Biggs of South Carolina, Mr. Harris of Maryland, Mr. Cloud, and Mr. Massie) 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 increase the limitation on capital losses and index the limitation to inflation.

Short title

This Act may be cited as the Capital Loss Inflation Fairness Act.

Increased limitation on capital losses

(a)

In general

Section 1211(b) of the Internal Revenue Code of 1986 is amended to read as follows:

(b)

Other taxpayers

(1)

In general

In the case of a taxpayer other than a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges, plus (if such losses exceed such gains) the lower of—

(A)

$14,250 ($7,125 in the case of a married individual filing a separate return), or

(B)

the excess of such losses over such gains.

(2)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2026, the dollar amounts in paragraph (1)(A) shall be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

the cost-of-living adjustment under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof.

If any increase determined under the preceding sentence is not a multiple of $25, such increase shall be rounded to the nearest multiple of $25.

(b)

Effective date

The amendment made by this section shall apply to losses in taxable years beginning after December 31, 2025.