Small Business Tax Reform Act

Summary

Small Business Tax Reform Act - Amends the Internal Revenue Code to reduce the normal tax on corporate income to 18 percent. Increases the surtax exemption to $150,000. Exempts from taxation any gain from the sale of a small business interest if the proceeds from such sale are reinvested in another small business within two years of the date of the sale. Permits a taxpayer election to use the practical cost recovery method for computing depreciation deductions. Establishes a useful life of two years, under such method, for highway transportation equipment, tools, and dies, and five years for machinery, rail, water, and air transportation equipment, office furniture, equipment and fixtures, and leasehold improvements. Limits the allowable deduction for depreciation under such method to $200,000 in any taxable year. Increases to $50,000 ($100,000 for married individuals filing joint tax returns) the amount of loss on small business corporation stock which may be treated as ordinary, rather than capital, loss. Increases the amount of equity a business concern may hold without losing its status as a small business under the Internal Revenue Code. Increases from 10 to 25 the number of shareholders a small business may have without losing Subchapter S corporate status. Permits a small business corporation to qualify as a regulated investment company. Permits a small business corporation to accumulate earnings and profits up to $1,000,000 without incurring the tax on accumulated earnings. Permits a sole proprietor whose business receipts for any prior taxable year did not exceed $1,000,000 to elect the cash receipts and disbursements method of accounting. Permits a taxpayer to deduct expenses for the purchase of equipment required to meet standards promulgated by the Environmental Protection Agency and the Occupational Safety and Health Administration in the year in which such expenses are incurred. Increases the investment tax credit rate from 10 to 12 percent and makes such increase permanent.

This text is taken from the official record. PoliticalRepo does not editorialize.

Timeline

No timeline events have been ingested for this record yet.

Votes

No vote records are attached yet.

Versions

No version snapshots stored. Document URLs remain at the source.

Documents

1 official file

• Introduced in Senate

  summary · EN · 7 October 1978

  Open at official source

Sponsors

No sponsors or actors listed by the source.

Related records

No cross-record relationships stored yet.