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).
Status:
Introduced
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