S 78 ISCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide a full exclusion for gain from certain small business stocks.CommentsClose CommentsPermalink

January 6, 2009CommentsClose CommentsPermalink

Mr. KERRY (for himself and Ms. SNOWE) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide a full exclusion for gain from certain small business stocks.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Invest in Small Business Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. INCREASED EXCLUSION AND OTHER MODIFICATIONS APPLICABLE TO QUALIFIED SMALL BUSINESS STOCK.

(a) Increased Exclusion-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (a) of section 1202 of the Internal Revenue Code of 1986 (relating partial exclusion for gain from certain small business stock) is amended to read as follows:CommentsClose CommentsPermalink





‘(a) Exclusion- Gross income shall not include 100 percent of any gain from the sale or exchange of qualified small business stock held for more than 4 years.’.CommentsClose CommentsPermalink





(2) RULE RELATING TO STOCK HELD AMONG MEMBERS OF CONTROLLED GROUP- Subsection (c) of section 1202 of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(4) STOCK HELD AMONG MEMBERS OF 25-PERCENT CONTROLLED GROUP NOT ELIGIBLE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Stock of a member of a 25-percent controlled group shall not be treated as qualified small business stock while held by another member of such group.CommentsClose CommentsPermalink





‘(B) 25-percent CONTROLLED GROUP- For purposes of subparagraph (A), the term ‘25-percent controlled group’ means any controlled group of corporations as defined in section 1563(a)(1), except that--CommentsClose CommentsPermalink





‘(i) ‘more than 25 percent’ shall be substituted for ‘at least 80 percent’ each place it appears in section 1563(a)(1), andCommentsClose CommentsPermalink





‘(ii) section 1563(a)(4) shall not apply.’.CommentsClose CommentsPermalink





(3) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Subsections (b)(2), (g)(2)(A), and (j)(1)(A) of section 1202 of such Code are each amended by striking ‘5 years’ and inserting ‘4 years’.CommentsClose CommentsPermalink





(B) The heading for section 1202 of such Code is amended by striking ‘partial’.CommentsClose CommentsPermalink





(C) The item relating to section 1202 in the table of sections for part I of subchapter P of chapter 1 of such Code is amended by striking ‘Partial exclusion’ and inserting ‘Exclusion’.CommentsClose CommentsPermalink





(D) Section 1223(13) of such Code is amended by striking ‘1202(a)(2),’.CommentsClose CommentsPermalink





(b) Repeal of Minimum Tax Preference-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (a) of section 57 of the Internal Revenue Code of 1986 (relating to items of tax preference) is amended by striking paragraph (7).CommentsClose CommentsPermalink





(2) TECHNICAL AMENDMENT- Subclause (II) of section 53(d)(1)(B)(ii) of such Code is amended by striking ‘, (5), and (7)’ and inserting ‘and (5)’.CommentsClose CommentsPermalink





(c) Repeal of 28 Percent Capital Gains Rate on Qualified Small Business Stock-CommentsClose CommentsPermalink





(1) IN GENERAL- Subparagraph (A) of section 1(h)(4) of the Internal Revenue Code of 1986 is amended to read as follows:CommentsClose CommentsPermalink





‘(A) collectibles gain, over’.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Section 1(h) of such Code is amended by striking paragraph (7).CommentsClose CommentsPermalink





(B)(i) Section 1(h) of such Code is amended by redesignating paragraphs (8), (9), (10), (11), (12), and (13) as paragraphs (7), (8), (9), (10), (11), and (12), respectively.CommentsClose CommentsPermalink





(ii) Sections 163(d)(4)(B), 854(b)(5), 857(c)(2)(D) of such Code are each amended by striking ‘section 1(h)(11)(B)’ and inserting ‘section 1(h)(10)(B)’.CommentsClose CommentsPermalink





(iii) The following sections of such Code are each amended by striking ‘section 1(h)(11)’ and inserting ‘section 1(h)(10)’:CommentsClose CommentsPermalink





(I) Section 301(f)(4).CommentsClose CommentsPermalink





(II) Section 306(a)(1)(D).CommentsClose CommentsPermalink





(III) Section 584(c).CommentsClose CommentsPermalink





(IV) Section702(a)(5).CommentsClose CommentsPermalink





(V) Section 854(a).CommentsClose CommentsPermalink





(VI) Section 854(b)(2).CommentsClose CommentsPermalink





(iv) The heading of section 857(c)(2) is amended by striking ‘1(h)(11)’ and inserting ‘1(h)(10)’.CommentsClose CommentsPermalink





(d) Increase Aggregate Asset Limitation for Qualified Small Businesses-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (1) of section 1202(d) of the Internal Revenue Code of 1986 (relating to qualified small business) is amended by striking ‘$50,000,000’ each place it appears and inserting ‘$100,000,000’.CommentsClose CommentsPermalink





(2) INFLATION ADJUSTMENT- Section 1202(d) of such Code is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(4) INFLATION ADJUSTMENT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In the case of any taxable year beginning in a calendar year after 2009, each of the $100,000,000 dollar amounts in paragraph (1) shall be increased by an amount equal to--CommentsClose CommentsPermalink





‘(i) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2008’ for ‘calendar year 1992’ in subparagraph (B) thereof.CommentsClose CommentsPermalink





‘(B) ROUNDING- If any amount as adjusted under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $100.’.CommentsClose CommentsPermalink





(e) Effective Date-CommentsClose CommentsPermalink





(1) IN GENERAL- The amendments made by this section apply to stock issued after December 31, 2009.CommentsClose CommentsPermalink





(2) SPECIAL RULE FOR STOCK ISSUED BEFORE JANUARY 1, 2010- The amendments made by subsections (a), (b), and (c) shall apply to sales or exchanges--CommentsClose CommentsPermalink





(A) made after December 31, 2009,CommentsClose CommentsPermalink





(B) of stock issued before such date,CommentsClose CommentsPermalink





(C) by a taxpayer other than a corporation.CommentsClose CommentsPermalink