Bills · HR 1199
IN COMMITTEE· 119TH CONGRESS
House BillHR 1199Taxation
Small Business Investment Act of 2025
INTRO FEB 11· LAST ACTION FEB 11
READING
5MIN
COSPONSORS
0
READER REACTIONS0 TOTAL
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- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because it aims to stimulate investment in small businesses, which are often seen as engines of job creation and innovation in the economy. By making it more attractive for individuals to put their money into new and growing companies through tax breaks, it could lead to more startups getting funded, more businesses expanding, and ultimately, more jobs.
If this bill becomes law, investors might be more willing to take risks on small businesses, knowing they could realize significant tax savings on their profits after a shorter period. This could lead to a healthier small business sector. If it doesn't pass, the current, less favorable tax rules for small business stock would remain, potentially dampening the enthusiasm of some investors and making it harder for small businesses to raise the capital they need to grow and innovate.
KEY PROVISIONS
4AI-extractedPROVISION 01
Reduces the minimum holding period for qualified small business stock from more than 5 years to 3 years, and introduces a phased exclusion where 50% of the gain is tax-free after 3 years, 75% after 4 years, and 100% after 5 years or more.
This makes it easier and faster for investors to qualify for significant tax benefits, encouraging earlier investment in small businesses.
PROVISION 02
Extends eligibility for "qualified small business stock" to include stock issued by S corporations, in addition to the previously eligible C corporations.
This significantly broadens the types of small businesses that can offer tax-advantaged investment opportunities, potentially increasing access to capital for a wider range of companies.
PROVISION 03
Allows the holding period of certain convertible debt instruments (bonds convertible into stock) to count towards the required holding period for qualified small business stock.
This simplifies the process for investors who initially invest via convertible debt, ensuring their full investment timeline is recognized for tax benefit purposes.
PROVISION 04
Clarifies that the sale of qualified small business stock with an excluded gain does not allow taxpayers to deduct previously accumulated passive activity losses.
This prevents investors from using the sale of tax-advantaged small business stock to unlock other unrelated tax losses, which could have implications for tax revenue.
SPONSORSHIP
1 + 0
R· Tennessee
YRS IN OFFICE
9
BILLS LED
31
ACTION TIMELINE
2 EVENTSFEB 11
Introduced in House
FEB 11
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 1199
Congress119th
StatusIn Committee
IntroducedFeb 11, 2025
Last actionFeb 11, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED FEB 11, 2025
House BillHR 1199Taxation
Small Business Investment Act of 2025
INTRODUCED FEB 11, 2025· LAST ACTION FEB 11, 2025
PASSAGE CHANCES
—%
READING
5 min
COSPONSORS
0
COMPLEXITY
Moderate
