IL HB5215

Resident taxpayers with net assets of $1 billion or more must annually recognize gains or losses as if all assets were sold at fair market value on December 31 of each taxable year, with gains added to net income for Illinois income tax purposes.

Assets subject to the tax include property owned by the taxpayer, their spouse, minor children, trusts where the taxpayer is a beneficiary, and contributions to private foundations or donor-advised funds made within the prior 5 years.

A phase-in cap limits taxable gains to 25% of net assets exceeding $1 billion; taxpayers may pay the initial tax in one lump sum or in 10 annual installments with a 7.5% annual deferral charge.

Tax credits are available for gains previously taxed by other states before the taxpayer became an Illinois resident, and net losses carry forward indefinitely rather than being recognized in the year incurred.

Revenue collected goes to the General Revenue Fund, with the Department of Revenue authorized to adopt rules preventing avoidance through year-end transfers or related-party arrangements; effective for taxable years ending on or after December 31, 2026.