(A) by inserting ‘‘or the corporation has
gain from the sale or exchange of any qualified
small business stock held for more than 5
years’’ before ‘‘, then’’, and
(B) by striking paragraph (2) and insert-
ing:
‘‘(2) a tax equal to the sum of—
‘‘(A) 34 percent of the sum of the net cap-
ital gain, determined by not taking into account
any gain or loss from the sale or exchange of
any qualified small business stock held for more
than 5 years, plus
‘‘(B) 17 percent of the net capital gain de-
termined by only taking into account such gain
or loss.
For purposes of this subsection, the term ‘qualified small
business stock’ has the meaning given such term by sec-
tion 1202.’’
(c) MINIMUM TAX TREATMENT.—
(1) IN GENERAL.—Subsection (a) of section 57
(relating to items of tax preference) is amended by
adding at the end thereof the following new para-
graph:
‘‘(8) EXCLUSION FOR GAINS ON SALE OF VEN-
TURE
CAPITAL
SMALL
BUSINESS
STOCK.—An
amount equal to the amount excluded from gross in-
come 
for 
the 
taxable 
year 
under 
section
1202(a)(1)(A) (relating to exclusion of gain on small
business stock other than seed capital stock).’’
(2) CONFORMING AMENDMENT.—Subclause (II)
of section 53(d)(2)(B)(ii) is amended by striking
‘‘and (6)’’ and inserting ‘‘(6), and (8)’’.
(d) LOSSES ON SMALL BUSINESS STOCK.—Section
1244(c)(3)(A) is amended by striking ‘‘$1,000,000’’ and
inserting ‘‘$5,000,000 (adjusted at the same time and
manner as under section 1202(c)(4))’’.
(e) CONFORMING AMENDMENTS.—
(1)(A) Section 172(d)(2) (relating to modifica-
tions with respect to net operating loss deduction) is
amended to read as follows:
‘‘(2) CAPITAL
GAINS
AND
LOSSES
OF
TAX-
PAYERS OTHER THAN CORPORATIONS.—In the case
of a taxpayer other than a corporation—
‘‘(A) the amount deductible on account of
losses from sales or exchanges of capital assets
shall not exceed the amount includable on ac-
count of gains from sales or exchanges of cap-
ital assets; and
‘‘(B) the exclusion provided by section
1202 shall not be allowed.’’
(B) Subparagraph (B) of section 172(d)(4) is
amended by inserting ‘‘, (2)(B),’’ after ‘‘paragraph
(1)’’.
(2) Paragraph (4) of section 642(c) is amended
to read as follows:
‘‘(4) ADJUSTMENTS.—To the extent that the
amount otherwise allowable as a deduction under
this subsection consists of gain described in section
1202(a), proper adjustment shall be made for any
exclusion allowable to the estate or trust under sec-
tion 1202. In the case of a trust, the deduction al-
lowed by this subsection shall be subject to section
681 (relating to unrelated business income).’’
(3) Paragraph (3) of section 643(a) is amended
by adding at the end thereof the following new sen-
tence: ‘‘The exclusion under section 1202 shall not
be taken into account.’’
(4) Paragraph (4) of section 691(c) is amended
by striking ‘‘1201, and 1211’’ and inserting ‘‘1201,
1202, and 1211, and for purposes of section
57(a)(8)’’.
(5) The second sentence of paragraph (2) of
section 871(a) is amended by inserting ‘‘such gains
and losses shall be determined without regard to sec-
tion 1202 and’’ after ‘‘except that’’.
(6) The table of sections for part I of sub-
chapter P of chapter 1 is amended by adding after
the item relating to section 1201 the following new
item:
‘‘Sec. 1202. Exclusion for gain from certain small business
stock.’’
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to stock issued (or treated as is-
sued) on or after January 1, 1993.
Æ
HR 902 IH——2