I 112th CONGRESS 2d Session H. R. 4139 IN THE HOUSE OF REPRESENTATIVES March 5, 2012 Mr. Daniel E. Lungren of California introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to extend permanently the 100 percent exclusion of gain from the sale or exchange of qualified small business stock.

1.

Permanent full exclusion applicable to qualified small business stock

(a)

Permanent full exclusion

(1)

In general

Subsection (a) of section 1202 of the Internal Revenue Code of 1986 is amended to read as follows: (a)

Exclusion

In the case of a taxpayer other than a corporation, gross income shall not include 100 percent of any gain from the sale or exchange of qualified small business stock held for more than 5 years. . (2)

Conforming amendments

(A)The heading for section 1202 of such Code is amended by striking Partial exclusion and inserting Exclusion. (B)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. (C)Section 1223(13) of such Code is amended by striking 1202(a)(2),. (b)

Repeal of minimum tax preference

(1)

In general

Subsection (a) of section 57 of the Internal Revenue Code of 1986 is amended by striking paragraph (7). (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). (c)

Repeal of 28 percent capital gains rate on qualified small business stock

(1)

In general

Subparagraph (A) of section 1(h)(4) of the Internal Revenue Code of 1986 is amended to read as follows: (A)collectibles gain, over . (2)

Conforming amendments

(A)Section 1(h) of such Code is amended by striking paragraph (7). (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. (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). (iii)The following sections of such Code are each amended by striking section 1(h)(11) and inserting section 1(h)(10): (I)Section 301(f)(4). (II)Section 306(a)(1)(D). (III)Section 584(c). (IV)Section 702(a)(5). (V)Section 854(a). (VI)Section 854(b)(2). (iv)The heading of section 857(c)(2) is amended by striking 1(h)(11) and inserting 1(h)(10). (d)

Effective date

The amendments made by this section apply to stock acquired after December 31, 2011.