TITLE V--TAX PROVISIONS

SEC. 500. SHORT TITLE; ETC.

    (a) Short Title.--This title may be cited as the ``Small Business 
Jobs Tax Relief Act of 2010''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this title is as 
follows:

Sec. 500. Short title; etc.
               Subtitle A--Small Business Tax Incentives

                       Part 1--General Provisions

Sec. 501. Temporary exclusion of 100 percent of gain on certain small 
                            business stock.
         Part 2--Limitations and Reporting on Certain Penalties

Sec. 511. Limitation on penalty for failure to disclose certain 
                            information.
Sec. 512. Annual reports on penalties and certain other enforcement 
                            actions.
                        Part 3--Other Provisions

Sec. 521. Increase in amount allowed as deduction for start-up 
                            expenditures.
Sec. 522. Nonrecourse small business investment company loans from the 
                            Small Business Administration treated as 
                            amounts at risk.
Sec. 523. Benefits under the Small Business Borrower Assistance Program 
                            excluded from gross income.
                     Subtitle B--Revenue Provisions

Sec. 531. Required minimum 10-year term, etc., for grantor retained 
                            annuity trusts.
Sec. 532. Crude tall oil ineligible for cellulosic biofuel producer 
                            credit.
Sec. 533. Time for payment of corporate estimated taxes.

               Subtitle A--Small Business Tax Incentives

                       PART 1--GENERAL PROVISIONS

SEC. 501. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON CERTAIN SMALL 
              BUSINESS STOCK.

    (a) In General.--Subsection (a) of section 1202 is amended by 
adding at the end the following new paragraph:
            ``(4) Special 100 percent exclusion.--In the case of 
        qualified small business stock acquired after March 15, 2010, 
        and before January 1, 2012--
                    ``(A) paragraph (1) shall be applied by 
                substituting `100 percent' for `50 percent',
                    ``(B) paragraph (2) shall not apply, and
                    ``(C) paragraph (7) of section 57(a) shall not 
                apply.''.
    (b) Conforming Amendments.--Paragraph (3) of section 1202(a) is 
amended--
            (1) by striking ``after the date of the enactment of this 
        paragraph and before January 1, 2011'' and inserting ``after 
        February 17, 2009, and before March 16, 2010''; and
            (2) by striking ``Special rules for 2009 and 2010'' in the 
        heading and inserting ``Special 75 percent exclusion''.
    (c) Effective Date.--The amendments made by this section shall 
apply to stock acquired after March 15, 2010.

         PART 2--LIMITATIONS AND REPORTING ON CERTAIN PENALTIES

SEC. 511. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE CERTAIN 
              INFORMATION.

    (a) In General.--Subsection (b) of section 6707A is amended to read 
as follows:
    ``(b) Amount of Penalty.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the amount of the penalty under subsection (a) with 
        respect to any reportable transaction shall be 75 percent of 
        the decrease in tax shown on the return as a result of such 
        transaction (or which would have resulted from such transaction 
        if such transaction were respected for Federal tax purposes).
            ``(2) Maximum penalty.--The amount of the penalty under 
        subsection (a) with respect to any reportable transaction for 
        any taxable year shall not exceed--
                    ``(A) in the case of a listed transaction, $200,000 
                ($100,000 in the case of a natural person), or
                    ``(B) in the case of any other reportable 
                transaction, $50,000 ($10,000 in the case of a natural 
                person).
            ``(3) Minimum penalty.--The amount of the penalty under 
        subsection (a) with respect to any transaction for any taxable 
        year shall not be less than $10,000 ($5,000 in the case of a 
        natural person).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to penalties assessed after December 31, 2006.

SEC. 512. ANNUAL REPORTS ON PENALTIES AND CERTAIN OTHER ENFORCEMENT 
              ACTIONS.

    (a) In General.--The Commissioner of Internal Revenue, in 
consultation with the Secretary of the Treasury, shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate an annual report on the penalties 
assessed by the Internal Revenue Service during the preceding year 
under each of the following provisions of the Internal Revenue Code of 
1986:
            (1) Section 6662A (relating to accuracy-related penalty on 
        understatements with respect to reportable transactions).
            (2) Section 6700(a) (relating to promoting abusive tax 
        shelters).
            (3) Section 6707 (relating to failure to furnish 
        information regarding reportable transactions).
            (4) Section 6707A (relating to failure to include 
        reportable transaction information with return).
            (5) Section 6708 (relating to failure to maintain lists of 
        advisees with respect to reportable transactions).
    (b) Additional Information.--The report required under subsection 
(a) shall also include information on the following with respect to 
each year:
            (1) Any action taken under section 330(b) of title 31, 
        United States Code, with respect to any reportable transaction 
        (as defined in section 6707A(c) of the Internal Revenue Code of 
        1986).
            (2) Any extension of the time for assessment of tax 
        enforced, or assessment of any amount under such an extension, 
        under paragraph (10) of section 6501(c) of the Internal Revenue 
        Code of 1986.
    (c) Date of Report.--The first report required under subsection (a) 
shall be submitted not later than December 31, 2010.

                        PART 3--OTHER PROVISIONS

SEC. 521. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR START-UP 
              EXPENDITURES.

    (a) In General.--Subsection (b) of section 195 is amended by adding 
at the end the following new paragraph:
            ``(3) Increased limitation for taxable years beginning in 
        2010 or 2011.--In the case of any taxable year beginning in 
        2010 or 2011, paragraph (1)(A)(ii) shall be applied--
                    ``(A) by substituting `$20,000' for `$5,000', and
                    ``(B) by substituting `$75,000' for `$50,000'.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

SEC. 522. NONRECOURSE SMALL BUSINESS INVESTMENT COMPANY LOANS FROM THE 
              SMALL BUSINESS ADMINISTRATION TREATED AS AMOUNTS AT RISK.

    (a) In General.--Subparagraph (B) of section 465(b)(6) is amended 
to read as follows:
                    ``(B) Qualified nonrecourse financing.--For 
                purposes of this paragraph--
                            ``(i) In general.--The term `qualified 
                        nonrecourse financing' means any financing--
                                    ``(I) which is qualified real 
                                property financing or qualified SBIC 
                                financing,
                                    ``(II) except to the extent 
                                provided in regulations, with respect 
                                to which no person is personally liable 
                                for repayment, and
                                    ``(III) which is not convertible 
                                debt.
                            ``(ii) Qualified real property financing.--
                        The term `qualified real property financing' 
                        means any financing which--
                                    ``(I) is borrowed by the taxpayer 
                                with respect to the activity of holding 
                                real property,
                                    ``(II) is secured by real property 
                                used in such activity, and
                                    ``(III) is borrowed by the taxpayer 
                                from a qualified person or represents a 
                                loan from any Federal, State, or local 
                                government or instrumentality thereof, 
                                or is guaranteed by any Federal, State, 
                                or local government.
                            ``(iii) Qualified sbic financing.--The term 
                        `qualified SBIC financing' means any financing 
                        which--
                                    ``(I) is borrowed by a small 
                                business investment company (within the 
                                meaning of section 301 of the Small 
                                Business Investment Act of 1958), and
                                    ``(II) is borrowed from, or 
                                guaranteed by, the Small Business 
                                Administration under the authority of 
                                section 303(b) of such Act.''.
    (b) Conforming Amendments.--Subparagraph (A) of section 465(b)(6) 
is amended--
            (1) by striking ``in the case of an activity of holding 
        real property,''; and
            (2) by striking ``which is secured by real property used in 
        such activity''.
    (c) Effective Date.--The amendments made by this section shall 
apply to loans and guarantees made after the date of the enactment of 
this Act.

SEC. 523. BENEFITS UNDER THE SMALL BUSINESS BORROWER ASSISTANCE PROGRAM 
              EXCLUDED FROM GROSS INCOME.

    (a) In General.--Part III of subchapter B of chapter 1 is amended 
by adding at the end the following new section:

``SEC. 139F. BENEFITS UNDER THE SMALL BUSINESS BORROWER ASSISTANCE 
              PROGRAM.

    ``(a) In General.--Gross income shall not include any amount paid 
on behalf of a borrower by the Administrator of the Small Business 
Administration under the Small Business Borrower Assistance program 
established under section 402 of the Small Business Assistance Fund Act 
of 2010 (as in effect immediately after the date of the enactment of 
such Act).
    ``(b) Denial of Double Benefit.--Notwithstanding any other 
provision of this subtitle, with respect to the person for whose 
benefit a payment described in subsection (a) is made--
            ``(1) Interest.--No deduction shall be allowed for interest 
        to the extent the liability for such interest is covered by 
        such payment.
            ``(2) Payments of principal.--If any payment is applied to 
        reduce the principal of the loan to which such payment 
        relates--
                    ``(A) Allocation among financed expenditures.--Such 
                payment shall be allocated pro rata among the 
                expenditures financed with such loan.
                    ``(B) Credits and deductible expenses.--No 
                deduction or credit shall be allowed for, or by reason 
                of, any such expenditure to the extent of the amount of 
                the payment allocated to such expenditure under 
                subparagraph (A).
                    ``(C) Adjustment of basis.--The adjusted basis of 
                any property acquired with such expenditure shall be 
                reduced to the extent of the amount of the payment 
                allocated to such expenditure under subparagraph 
                (A).''.
    (b) Clerical Amendments.--The table of sections for part III of 
subchapter B of chapter 1 is amended by adding at the end the following 
new item:

``Sec. 139F. Benefits under the Small Business Borrower Assistance 
                            Program.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made after the date of the enactment of this Act.

                     Subtitle B--Revenue Provisions

SEC. 531. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR GRANTOR RETAINED 
              ANNUITY TRUSTS.

    (a) In General.--Subsection (b) of section 2702 is amended--
            (1) by redesignating paragraphs (1), (2) and (3) as 
        subparagraphs (A), (B), and (C), respectively, and by moving 
        such subparagraphs (as so redesignated) 2 ems to the right;
            (2) by striking ``For purposes of'' and inserting the 
        following:
            ``(1) In general.--For purposes of'';
            (3) by striking ``paragraph (1) or (2)'' in paragraph 
        (1)(C) (as so redesignated) and inserting ``subparagraph (A) or 
        (B)''; and
            (4) by adding at the end the following new paragraph:
            ``(2) Additional requirements with respect to grantor 
        retained annuities.--For purposes of subsection (a), in the 
        case of an interest described in paragraph (1)(A) (determined 
        without regard to this paragraph) which is retained by the 
        transferor, such interest shall be treated as described in such 
        paragraph only if--
                    ``(A) the right to receive the fixed amounts 
                referred to in such paragraph is for a term of not less 
                than 10 years,
                    ``(B) such fixed amounts, when determined on an 
                annual basis, do not decrease relative to any prior 
                year during the first 10 years of the term referred to 
                in subparagraph (A), and
                    ``(C) the remainder interest has a value greater 
                than zero determined as of the time of the transfer.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transfers made after the date of the enactment of this Act.

SEC. 532. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL PRODUCER 
              CREDIT.

    (a) In General.--Clause (iii) of section 40(b)(6)(E) is amended--
            (1) by striking ``or'' at the end of subclause (I),
            (2) by striking the period at the end of subclause (II) and 
        inserting ``, or'',
            (3) by adding at the end the following new subclause:
                                    ``(III) such fuel has an acid 
                                number greater than 25.'', and
            (4) by striking ``unprocessed'' in the heading and 
        inserting ``certain''.
    (b) Effective Date.--The amendment made by this section shall apply 
to fuels sold or used on or after January 1, 2010.

SEC. 533. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    The percentage under paragraph (2) of section 561 of the Hiring 
Incentives to Restore Employment Act in effect on the date of the 
enactment of this Act is increased by 7.75 percentage points.
Title V: Tax Provisions - Small Business Jobs Tax Relief Act of 2010 - Subtitle A: Small Business Tax Incentives - Part 1: General Provisions - (Sec. 501) Amends the Internal Revenue Code to increase from 50% to 100% the exclusion from gross income of the gain from the sale or exchange of qualified small business stock acquired after March 15, 2010, and before January 1, 2012.

Part 2: Limitations and Reporting on Certain Penalties - (Sec. 511) Limits the penalty for failure to disclose a reportable transaction (a transaction determined by the Internal Revenue Service [IRS] as having a potential for tax avoidance or evasion) to 75% of the decrease in tax resulting from such transaction.

(Sec. 512) Requires the Commissioner of Internal Revenue to report by December 31, 2010, and annually thereafter, to the House Committee on Ways and Means and the Senate Committee on Finance on penalties assessed for certain tax shelters and reportable transactions.

Part 3: Other Provisions - (Sec. 521) Increases the tax deduction for trade or business start-up expenditures from $5,000 to $20,000 in 2010 and 2011.

(Sec. 522) Revises the definition of "qualified nonrecourse financing" to include qualified nonrecourse real property or Small Business Investment Company financing as amounts at risk for purposes of determining the deductibility of losses from certain investment activities, including farming, leasing, and energy exploration.

(Sec. 523) Excludes from gross income any amount paid for a borrower under the Small Business Administration (SBA) borrower assistance program.

Subtitle B: Revenue Provisions - (Sec. 531) Revises rules for valuing assets in grantor retained annuity trusts to require that the right to receive fixed amounts from an annuity last for a term of not less than 10 years, that such fixed amounts not decrease during the first 10 years of the annuity term, and that the remainder interest have a value greater than zero when transferred.

(Sec. 532) Excludes any fuel with an acid number greater than 25 from the definition of "cellulosic biofuel" for purposes of the tax credit for alcohol used as fuel.

(Sec. 533) Increases by 7.75% the estimated tax installment for the third quarter of 2015 for corporations with assets of not less than $1 billion.
To amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes.