A bill to amend the Internal Revenue Code of 1954 to provide a credit against tax for investment in small business participating debentures, and to provide additional tax incentives for the issuance of such debentures.

Summary

Amends the Internal Revenue Code to allow a taxpayer a credit against the income tax (not to exceed $5,000 per year, or $10,000 in the case of a joint return) for investment in small business participating debentures. Specifies a formula for the computation of such credit. Provides for a carryover of the excess for up to seven years. Disallows such credit for debentures: (1) issued by a small business in which the taxpayer has a defined interest; or (2) disposed of within the same taxable year in which they are acquired, and before the deadline for filing of the tax return. Limits qualified small businesses to those whose equity capital does not exceed $25,000,000. Applies long-term capital gains treatment to amounts actually paid to a taxpayer in respect of a small business participating debenture, which constitute the distribution of a share of the earnings of the issuer. Treats losses on such debentures as ordinary losses. Allows an interest deduction for interest and share-of-earnings payments made on such a debenture. Provides for complete or partial disallowance of the tax credit in specified circumstances.

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Documents

1 official file

• Introduced in Senate

  summary · EN · 11 July 1979

  Open at official source

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