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S 695119th CongressIntroduced
Small Business Investment Act of 2025
Introduced: Oct 28, 2025
Standard Summary
Comprehensive overview in 1-2 paragraphs
The Small Business Investment Act of 2025 modifies the exclusion for gain from qualified small business stock, introducing a phased percentage schedule based on holding period and adjusting related IRC provisions.
Key Points
- 1Section 1202(a)(1) now uses a table: 50% exclusion for 3‑year holds, 75% for 4‑year holds, 100% for 5‑year or longer holds.
- 2Holding period requirement reduced from 5 to 3 years.
- 3Conforming amendments to related sections of the IRC, including definitions of qualified small business stock and treatment of convertible debt instruments.
- 4Effective date applies to stock acquired after enactment; certain provisions take effect as if included in the 2010 Act.
- 5Clarifications for S‑corporations and passive loss treatment.
Impact Areas
Taxpayers investing in or owning small business stockSmall business owners and investorsFinancial advisors and tax professionalsInternal Revenue Service enforcement and compliance
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