I 
109TH CONGRESS 
1ST SESSION H. R. 3461 
To amend the Internal Revenue Code of 1986 to exempt from income tax 
the gain from the sale of a business closely held by an individual who 
has attained age 62, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 27, 2005 
Mr. ANDREWS 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 exempt 
from income tax the gain from the sale of a business 
closely held by an individual who has attained age 62, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Seniors’ Family Busi-
ness Enhancement Act’’.
SEC. 2. EXCLUSION FROM INCOME TAX OF GAIN FROM 
SALE OF CLOSELY HELD BUSINESS BY INDI-
VIDUALS WHO HAVE ATTAINED AGE 62. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
items specifically excluded from gross income) is amended 
by inserting after section 139A the following new section: 
‘‘SEC. 139B. SALE OF CLOSELY HELD BUSINESS BY INDIVID-
UALS WHO HAVE ATTAINED AGE 62. 
‘‘(a) IN GENERAL.—In the case of an individual, 
gross income does not include the gain (whether received 
in single sum or otherwise) from the sale or exchange of 
a qualified interest in a closely held business if— 
‘‘(1) the individual has attained age 62 before 
the date of such sale or exchange, 
‘‘(2) the adjusted gross income of the individual 
for the tax year in which such sale or exchange oc-
curs does not exceed $1,000,000 (determined with-
out regard to such sale or exchange), and 
‘‘(3) the individual so elects. 
‘‘(b) ONE-TIME EXCLUSION.—Subsection (a) shall 
not apply to any sale or exchange by the taxpayer if an 
election under subsection (a) with respect to any other sale 
or exchange is in effect. 
‘‘(c) QUALIFIED INTEREST
IN
A CLOSELY HELD 
BUSINESS.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the term ‘qualified interest in a closely held 
business’ means an interest in a closely held busi-
ness (as defined by section 6166(b)(1)) if the fair 
market value of the assets of such business is 
$500,000 or less, determined at the time of such 
sale or exchange. 
‘‘(2) 
RULE
FOR
APPLYING
SECTION 
6166(b)(1).—For purposes of paragraph (1), rules 
similar to rules of paragraphs (2) and (9) of sub-
section (b) and subsection (c) of section 6166 shall 
apply. 
‘‘(3) AGGREGATION RULES.—All persons treat-
ed as a single employer under subsection (a) or (b) 
of section 52 or subsection (m) or (o) of section 414 
shall be treated as one person for purposes of para-
graph (1). 
‘‘(d) ELECTION.—An election under subsection (a) 
may be made or revoked at any time before the expiration 
of the period for making a claim for credit or refund of 
the tax imposed by this chapter for the taxable year in 
which the sale or exchange occurred.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code
is amended by inserting after the item relating to section 
139A the following new item: 
‘‘Sec. 139B. Sale of closely held business by individuals who have attained age 
62.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales and exchanges made after 
December 31, 2004. 
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