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Small Business Tax Relief: Shorter Holding Period, Increased Exclusions.

This act makes it easier for small businesses to raise capital and for investors to benefit more from their investments. It modifies tax exclusions for gains from qualified small business stock, reducing the required holding period and increasing the exclusion amount. This could encourage investment in local businesses and support their growth.
Key points
Gains from selling small business stock can be tax-exempt after just 3 years of holding, instead of 5 years.
The tax exclusion for gains from small business stock increases gradually: 50% after 3 years, 75% after 4 years, and 100% after 5 years.
New rules allow tax exclusion for gains from small business stock that were previously S corporations, expanding investment opportunities.
Investors who convert qualified debt instruments into small business stock can count the debt instrument holding period towards the stock holding period, making it easier to meet tax exclusion requirements.
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Introduced
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Additional Information
Print number: 119_HR_1199
Sponsor: Rep. Kustoff, David [R-TN-8]
Process start date: 2025-02-11
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Summarized by: gemini-2.5-flash
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Small Business Investment Act of 2025

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_1199.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-02-11.

What are the main provisions?

Key points include:

  • Gains from selling small business stock can be tax-exempt after just 3 years of holding, instead of 5 years.
  • The tax exclusion for gains from small business stock increases gradually: 50% after 3 years, 75% after 4 years, and 100% after 5 years.
  • New rules allow tax exclusion for gains from small business stock that were previously S corporations, expanding investment opportunities.
  • Investors who convert qualified debt instruments into small business stock can count the debt instrument holding period towards the stock holding period, making it easier to meet tax exclusion requirements.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Kustoff, David [R-TN-8].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-22.

CATEGORIES

Taxes Economy