100% Exclusion of Small
Business Capital Gains:
taxpayers may exclude 50 percent of the gain from the sale
of certain small business stock acquired at original issue
and held for more than five years. For stock acquired after
February 17, 2009 and before January 1, 2011, the exclusion
is increased to 75 percent. At the time of sale, however,
28% of the excluded gain will be treated as a tax preference
item subject to the alternative minimum tax (AMT).
General Business Credit
Carried Back Five Years:
This bill would extend the
one year carry-back for general business credits to five
years for certain small businesses. This would apply to
general business credits for those sole proprietorships,
partnerships and non-publicly traded corporations with $50
million or less in average annual gross receipts for the
prior three years.
General Business Credit Not
Subject to AMT:
Normally, a few credits may
be used to offset AMT liability, such as the credit for
small business employee health insurance expense. This bill
would allow certain small businesses to use all types of
general business credits against their AMT.
S Corp Holding Period:
Generally, a C corporation
converting to an S corporation must hold onto any
appreciated assets for 10 years following its conversion or
face a business-level tax imposed on the built-in gain at
the highest corporate rate of 35 percent. This holding
period is reduced where the 7th taxable year in
the holding period preceded the taxable year beginning in
2009 or 2010.
Increase Small Business
Administration (SBA) Loan Limits:
This provision would
increase 7(a) loan limits from $2 million to $5 million, 504
loans from $1.5 million to $5.5 million, and microloans from
$35,000 to $50,000.
Small Business Lending Fund:
The bill would authorize the
creation of the Small Business Lending Fund to provide the
Treasury Department with the ability to purchase preferred
stock and other debt instruments from eligible financial
institutions with less than $10 billion in total assets.
Eligible institutions include insured depositories, bank and
savings and loan holding companies, and certain community
development loan funds.
State Small Business Credit
The bill would provide $900
million in grants to States to support small business
Increase of Section 179
Expensing and Expansion to Certain Real Property:
This bill would increase the
thresholds to write-off up to $500,000 of capital
expenditures subject to a phase-out once these capital
expenditures exceed $2,000,000 for the taxable years
beginning in 2010 and 2011.
Extension of Bonus
This bill would extend the
additional, first-year 50 percent depreciation for
qualifying property purchased and placed in service in 2010.
Increased Deduction for
For the taxable year
beginning in 2010, this bill would temporarily increase the
amount of start-up expenditures that may be deducted to
$10,000 subject to a $60,000 phase-out threshold.
Small Business Export
The bill would authorize
funds for U.S. Trade Representative’s market access and
trade enforcement activities targeted at helping small
business increase market access and would ensure a level
playing field on which to sell their U.S. made goods.
Business Trade Opportunities:
It would elevate the SBA’s
Office of International Trade and adjusts the agency’s
international trade loan programs to provide small
businesses with practical, user-friendly financing options.
The provision would provide $60 million over two years to
establish the State Trade and Export Promotion Grant Program
(STEP), which seeks to increase the number of small
businesses that export by helping them to defray startup
costs associated with exporting.
Improved Small Business
Federal Contracting Opportunities:
The bill would remove the
red tape and closes loopholes that too often put government
work into the hands of multinational corporations instead of
Main Street businesses. It would establish accountability
of large business prime contractors for prompt payment to
small business subcontractors.
Relief for Community
This provision would allow
SBA to waive or reduce the non-federal share of its funding
requirements for up to one year, through fiscal year 2012,
for certain Women’s Business Centers (WBCs) and microloan
intermediaries, which provide assistance to start and grow
small businesses with an emphasis on those in underserved
Modify Section 6707A
The bill would revise
section 6707A of the Internal Revenue Code to make the
penalty for failing to disclose a reportable transaction
proportionate to the underlying tax savings. The penalty
for failure to disclose reportable transactions to the IRS
would be set at 75 percent of the tax benefit received. The
minimum penalty under this bill is $10,000 for corporations
and $5,000 for individuals, and the maximum penalty is
$200,000 for corporations and $100,000 for individuals.
Deductibility of Health
Insurance for the Purposes of Calculating Self-Employment
This provision would allow
business owners to deduct the cost of health insurance
incurred in 2010 for themselves and their family members in
the calculation of their 2010 self-employment tax.
Enhancements to Small
Business Contracting Parity Programs:
Place the small business
contracting programs -- HUBZone, 8(a), Service-Disabled
Veterans and Women-Owned Businesses -- on a level playing
field when competing for federal contracts.
Disaster Recovery to Include Aquaculture:
Allow SBA, to make economic
injury disaster loans to these businesses.
Reporting for Rental Property Expense Payments:
This provision would
strengthen the Regulatory Flexibility Act by requiring
agencies to respond to the SBA Chief Counsel of
Advocacy’s comments in the final rule.
Reporting for Rental Property Expense Payments.
The bill would require persons receiving rental income from
real property to file information returns to the IRS and to
service providers reporting payments of $600 or more during
the year for rental property expenses. In general, there is
an exception for individuals renting their principal
residences, including active members of the military, from
the reporting requirements.
for Failure to File Information Returns:
The bill would increase penalties for failure to timely file
information returns to the IRS. The first-tier penalty is
increased from $15 to $30, and the calendar year maximum
would be increased from $75,000 to $250,000. The
second-tier penalty would be increased from $30 to $60, and
the calendar year maximum is increased from $150,000 to
$500,000. The third-tier penalty would be increased from
$50 to $100, and the calendar year maximum from $250,000 to
Application of Levy to
Payments to Federal Vendors Relating to Property:
The bill clarifies that
Treasury’s continuous levy authority on government payments
to Federal contractors who owe back taxes to the IRS applies
to amounts paid for property, as well as to payments for
goods and services.
Application of Continuous
Levy to Tax Liabilities of Certain Federal Contractors:
The bill allows IRS to issue
levies prior to a CDP hearing on Federal tax liabilities of
Federal contractors. It would also provide the taxpayer
with an opportunity for a CDP hearing within a reasonable
time after a levy is issued.
Clarify Bad Check Penalty:
The bill would expand the
penalty for submitting a bad check to the IRS for payments
made through any commercially acceptable means, including