I 

112TH CONGRESS 

2D SESSION H. R. 4139 

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. 

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 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. PERMANENT FULL EXCLUSION APPLICABLE TO 

4 QUALIFIED SMALL BUSINESS STOCK. 

5 (a) PERMANENT FULL EXCLUSION.— 

6 (1) IN GENERAL.—Subsection (a) of section 

7 1202 of the Internal Revenue Code of 1986 is 

8 amended to read as follows: 


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1 ‘‘(a) EXCLUSION.—In the case of a taxpayer other 

2 than a corporation, gross income shall not include 100 

3 percent of any gain from the sale or exchange of qualified 

4 small business stock held for more than 5 years.’’. 

5 (2) CONFORMING AMENDMENTS.— 

6 (A) The heading for section 1202 of such 

7 Code is amended by striking ‘‘PARTIAL EX8 CLUSION’’ and inserting ‘‘EXCLUSION’’. 

9 (B) The item relating to section 1202 in 

10 the table of sections for part I of subchapter P 

11 of chapter 1 of such Code is amended by strik12 ing ‘‘Partial exclusion’’ and inserting ‘‘Exclu13 sion’’. 

14 (C) Section 1223(13) of such Code is 

15 amended by striking ‘‘1202(a)(2),’’. 

16 (b) REPEAL OF MINIMUM TAX PREFERENCE.— 

17 (1) IN GENERAL.—Subsection (a) of section 57 

18 of the Internal Revenue Code of 1986 is amended by 

19 striking paragraph (7). 

20 (2) TECHNICAL AMENDMENT.—Subclause (II) 

21 of section 53(d)(1)(B)(ii) of such Code is amended 

22 by striking ‘‘, (5), and (7)’’ and inserting ‘‘and (5)’’. 

23 (c) REPEAL OF 28 PERCENT CAPITAL GAINS RATE

24 ON QUALIFIED SMALL BUSINESS STOCK.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 1(h)(4) of the Internal Revenue Code of 1986 is 

3 amended to read as follows: 

4 ‘‘(A) collectibles gain, over’’. 

5 (2) CONFORMING AMENDMENTS.— 

6 (A) Section 1(h) of such Code is amended 

7 by striking paragraph (7). 

8 (B)(i) Section 1(h) of such Code is amend9 ed by redesignating paragraphs (8), (9), (10), 

10 (11), (12), and (13) as paragraphs (7), (8), (9), 

11 (10), (11), and (12), respectively. 

12 (ii) Sections 163(d)(4)(B), 854(b)(5), 

13 857(c)(2)(D) of such Code are each amended 

14 by striking ‘‘section 1(h)(11)(B)’’ and inserting 

15 ‘‘section 1(h)(10)(B)’’. 

16 (iii) The following sections of such Code 

17 are each amended by striking ‘‘section 

18 1(h)(11)’’ and inserting ‘‘section 1(h)(10)’’: 

19 (I) Section 301(f)(4). 

20 (II) Section 306(a)(1)(D). 

21 (III) Section 584(c). 

22 (IV) Section 702(a)(5). 

23 (V) Section 854(a). 

24 (VI) Section 854(b)(2). 


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1 (iv) The heading of section 857(c)(2) is 

2 amended by striking ‘‘1(h)(11)’’ and inserting 

3 ‘‘1(h)(10)’’. 

4 (d) EFFECTIVE DATE.—The amendments made by 

5 this section apply to stock acquired after December 31, 

6 2011. 

Æ 


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