Capital gains indexing could affect tax equity deals.

Conservatives have been pressuring the Trump administration to declare that the tax basis in capital assets can be adjusted for inflation.

A decision could come as early as this fall.

Most partnership interests are capital assets.

Each partner has an “outside basis” in its partnership interest that affects the timing of when tax losses can be used and how much cash the partner can be distributed tax free.

It is not yet clear to what assets or instruments indexing would apply.

The US Department of Justice advised in 1992, during the George H.W. Bush administration, that indexing would require Congressional action, as the Treasury lacks authority to adopt indexing on its own. The current attorney general, William Barr, was also attorney general then.

Treasury Secretary Steve Mnuchin said at the G-7 finance ministers meeting in France in mid-July that indexing remains under consideration, but no decision has been made. Forty-one Democratic Senators sent Mnuchin a letter in early August urging Treasury not to index on grounds that government revenue would be reduced largely for the benefit of wealthier Americans with significant investments. Twenty-one Republican Senators sent Mnuchin a letter at the end of July urging him to index.

President Trump is weighing whether to issue an executive order bypassing Congress.