Summary: S.1860 — 96th Congress (1979-1980)All Information (Except Text)

Bill summaries are authored by CRS.

Shown Here:
Reported to Senate with amendment(s) (05/15/1980)

(Reported to Senate from the Select Committee on Small Business with amendment, S. Rept. 96-734)

=Title I: Amendments to the Internal Revenue Code of 1954= - Small Business Research and Development Tax Incentive Act of 1979 - Amends the Internal Revenue Code to allow taxpayers who sell small business stock to recognize the gain from such sale to the extent such gain exceeds the cost of the purchase of other small business stock within 18 months after such sale. Sets forth definitions and special rules applicable to such nonrecognition of gain. Provides procedures for the reduction of basis of small business stock purchased during such 18-month period. Provides, upon notification to the Secretary of the Treasury, a three-year statutory period for the assessment of any deficiency attributable to any such gain.

Sets forth the procedure for determining the period for which the taxpayer has held small business stock which resulted in nonrecognition of gain on the sale of such stock.

Allows a taxpayer, other than a corporation, to deduct a specified percentage of his net small business capital gain from his gross income applicable to stock acquired after December 31, 1979.

Declares that in the case of a qualified small business concern, a net operating loss in any taxable year after December 31, 1979, shall be a net operating loss carryover to each of the ten taxable years following such loss.

Allows a qualified small business concern to treat research and experimental expenditures for the acquisition or improvement of property as expenses not chargeable to its capital account. Allows such concerns to treat such expenditures for any property subject to a depreciation or depletion allowance as deferred expenses, and in the case of a building such deferred expense shall be allowed ratably over a period of 120 months.

Allows a tax exclusion for small business concerns engaged in a trade or business other than real estate, for deposits made into a reserve for research and development with specified limitations. Disallows a deduction for amounts paid from a reserve for research and development which is used by the taxpayer for research and experimental expenditures, if such expenditures may be taken into account by the taxpayer under other provisions of the Code. Specifies the percentage the taxpayer must include in gross income for amounts from the reserve not used for research and development. Specifies that a contribution to such reserve may be made only in cash for purposes of this Act. Sets forth requirements and procedures for treatment of such reserve when the taxpayer ceases to be a small business concern.

Sets forth the definition of qualified stock options and requirements under which employees may use such granted stock options.

Amends the Internal Revenue Code to allow small business corporations to include 100 shareholders, provided such corporations are not venture capital corporations.

Makes amendments under this title applicable to taxable years beginning after December 31, 1979.