HB3475 Summary

• Applies a mark-to-market tax to Illinois resident individuals with net assets worth $50,000,000 or more, requiring them to recognize gains or losses as if all assets were sold at fair market value on specified dates.

• For tax year 2020, affected taxpayers must recognize deemed gains up to a phase-in cap amount (equal to one-quarter of net assets exceeding $50,000,000) and may pay the resulting tax in one lump sum or in 10 equal annual installments with a 7.5% annual deferral charge.

• For subsequent years beginning January 1, 2021 and beyond, the same mark-to-market taxation applies annually, with net losses carrying forward indefinitely rather than being recognized in the current year.

• Includes a credit for taxes previously paid to other states on gains accumulated before becoming an Illinois resident, limited to the lesser of Illinois tax owed or the amount taxed by the other state.

• Requires the Department of Revenue to create reporting forms listing assets by category with their adjusted basis, fair market value, and taxable gain, with specific filing requirements for individuals with cumulative adjusted gross income exceeding $30,000,000 over the prior 10 years.