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H.R. 1199 119th Congress House

Small Business Investment Act of 2025

Official title: To amend the Internal Revenue Code of 1986 to modify the exclusion for gain from qualified small business stock.

Introduced: February 11, 2025 Introduced by: David Kustoff Republican · Tennessee See on congress.gov
Taxation
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 Everywhere this bill has been 2 steps
Introduced
In committee
Reported out
Passed House
Passed Senate
To President
Became law
Feb 11, 2025
Referred to the House Committee on Ways and Means.
Feb 11, 2025
Introduced in House
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What's happening now February 11, 2025

Referred to the House Committee on Ways and Means.

 Plain-English summary Congressional Research Service

Small Business Investment Act of 2025

This bill reduces the time period a noncorporate taxpayer is required to hold qualified small business stock (QSBS) before a percentage of the gain on the sale or exchange of such stock may be excluded from gross income. (Limitations apply.) The bill also expands QSBS to include qualified debt instruments and certain corporate stock.

Under current law, a noncorporate taxpayer may exclude from gross income 100% of the gain from the sale or exchange of QSBS acquired after September 27, 2010 (or a smaller percentage if acquired on or before such date) and held for more than five years. Further, under current law, QSBS must be C corporation stock. (Exclusions and other requirements apply.)

The bill allows a noncorporate taxpayer to exclude from gross income

  • 50% of the gain on the sale or exchange of QSBS (purchased after the enactment date of the bill) held for three years,
  • 75% of the gain on the sale or exchange of such stock held for four years, and
  • 100% of the gain on the sale or exchange of such stock held for five years.

Further, the bill expands QSBS to include stock acquired through the conversion of a qualified convertible debt instrument (e.g., bond converted into stock). Under the bill, the holding period of such stock includes the time period during which the qualified convertible debt instrument is held.

Finally, the bill expands QSBS to include corporate stock, not just C corporation stock. (Limitations apply.).

 Related & companion bills 1
  • S 695 Small Business Investment Act of 2025
 Bill text 1 version

Source documents hosted by congress.gov.

 Committees of jurisdiction 1
 Lobbying activity 29

Registered lobbyists who named this bill in their disclosure filings. Source: federal Lobbying Disclosure Act filings.

Bodies those filers lobbied

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APA
U.S. Congress. (2026). H.R. 1199: Small Business Investment Act of 2025. 119th Congress. Open America. https://openamerica.io/bill/119-HR-1199/
MLA
"H.R. 1199: Small Business Investment Act of 2025." 119th Congress, 2026, Open America, https://openamerica.io/bill/119-HR-1199/.
Bluebook (legal)
H.R. 1199, 119th Cong. (2026), https://openamerica.io/bill/119-HR-1199/.
Markdown link
[H.R. 1199: Small Business Investment Act of 2025](https://openamerica.io/bill/119-HR-1199/)
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