Small Business Investment Act of 2023

HR 2767 (Small Business Investment Act of 2023) modifies tax rules for small business stock by reducing the required holding period for full capital gains tax exclusion from 5 years to 3 years, with a phased approach: 50% exclusion after 3 years, 75% after 4 years, and 100% after 5 years. It also allows stock acquired through convertible debt to count toward the holding period and clarifies rules for S corporations regarding ownership and tax treatment. These changes directly affect small business owners who sell qualifying stock, making tax exclusion more accessible for earlier sales. The bill updates existing Internal Revenue Code provisions without creating new government programs or funding.