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Tax breaks for small business investors: shorter holding, higher exclusions.

New rules make it easier to invest in small businesses by reducing the required stock holding period to 3 years for tax benefits. They also increase the tax exclusion for gains from selling small business stock, potentially encouraging support for local enterprises and job creation.
Key points
Shorter holding period: Instead of 5 years, only 3 years of holding small business stock are needed to qualify for tax exclusion on gains.
Increased tax exclusion: After 5 years of holding, gains from selling small business stock can be 100% tax-exempt.
Convertible debt instruments included: Investors converting debt instruments into small business stock can also benefit from tax breaks.
Broader company eligibility: Tax benefits will apply to a wider range of small businesses, regardless of their legal structure (e.g., S corporations).
article Official text account_balance Process page
Introduced
Citizen Poll
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Additional Information
Print number: 119_S_695
Sponsor: Sen. Cornyn, John [R-TX]
Process start date: 2025-02-24
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Summarized by: gemini-2.5-flash-preview-05-20
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_S_695.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2025-02-24.

What are the main provisions?

Key points include:

  • Shorter holding period: Instead of 5 years, only 3 years of holding small business stock are needed to qualify for tax exclusion on gains.
  • Increased tax exclusion: After 5 years of holding, gains from selling small business stock can be 100% tax-exempt.
  • Convertible debt instruments included: Investors converting debt instruments into small business stock can also benefit from tax breaks.
  • Broader company eligibility: Tax benefits will apply to a wider range of small businesses, regardless of their legal structure (e.g., S corporations).
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 Sen. Cornyn, John [R-TX].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-23.

CATEGORIES

Taxes Economy