# 119-s-695: Small Business Investment Act of 2025

119-s-695, Small Business Investment Act of 2025, is a 119th Congress bill sponsored by Sen. Cornyn, John [R-TX] (R-TX); status introduced; PRIA reads it as touching household money (as of 2025-12-21).

- Canonical: https://policyrisk.com/legislation/119-s-695
- As of: 2025-12-21
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: 119-s-695
- Congress: 119
- Title: Small Business Investment Act of 2025
- Status: introduced
- Introduced: 2025-02-24
- Sponsor: Sen. Cornyn, John [R-TX] (R-TX)
- Cosponsors: 0
- Policy area: Taxation
- Touches household money: yes
- Last recorded action: 2025-12-21

## Summary

**A tiered holding-period QSBS exclusion** would replace the fixed 50% gain break with graduated exclusions based on how long stock is held. The bill would cut the minimum holding period to 3 years, add a tacking rule for qualified convertible debt, and extend QSBS treatment beyond C corporations to include S corporations and similar pass-throughs. - Investors and founders: Early-stage investors could qualify for a partial tax exclusion sooner. Stock held 3 years would get a 50% exclusion, 4 years 75%, and 5 or more years 100%. - Convertible debt holders: Owners of qualified convertible debt could "tack" the debt holding period onto converted stock. That can help them meet the QSBS holding test faster after conversion. - S‑corporation owners and small businesses: The bill removes the C corporation requirement and adjusts aggregation and passive-loss rules so S corporations and their owners can access the QSBS exclusion.

## Provisions PRIA read

- Lower taxes for qualifying startup gains: benefit, high. If enacted, you would be able to exclude more of your gain when you sell qualifying small business stock. Stock held at least 3 years could exclude 50% of the gain, at least 4 years could exclude 75%, and 5 years or more could exclude 100%. These rules would apply to stock you buy after the law tak…
- S-corp owners could get stock exclusion: benefit, medium. If enacted, stock in some S corporations would be able to meet the small-business stock rules. The bill would remove the rule that the issuer must be a C corporation and would count S‑corp ownership when testing controlled groups. It would also say gains excluded under the rule are not limited by p…
- Count convertible debt toward holding period: benefit, low. If enacted, you would be able to count time you held certain convertible debt toward the holding period for qualifying small business stock when that debt converts to stock. The rule would apply only if the debt was originally issued to you, convertible into the stock, issued after enactment, the c…
- Pre-2010 small business stock AMT preserved: benefit, low. If enacted, qualifying small business stock you bought on or before the 2010 small business jobs law would keep its earlier alternative minimum tax (AMT) treatment. The bill would treat that preservation as if it had been included in the 2010 law. This only affects stock acquired on or before that…

## Related bills

- 119-s-1071: National Defense Authorization Act for Fiscal Year 2026
- 119-s-4952: Protecting American Taxpayers Act
- 119-s-4378: Protecting American Taxpayers Act
- 119-s-1748: Kids Online Safety Act
- 119-s-4726: PEACE in Sudan Act
- 119-s-4065: STAND with Taiwan Act of 2026

## Sources
- [119-s-695 on Congress.gov](https://www.congress.gov/bill/119th-congress/senate-bill/695)

## Related
- [119-s-1071: National Defense Authorization Act for Fiscal Year 2026](https://policyrisk.com/legislation/119-s-1071)
- [119-s-4952: Protecting American Taxpayers Act](https://policyrisk.com/legislation/119-s-4952)
- [119-s-4378: Protecting American Taxpayers Act](https://policyrisk.com/legislation/119-s-4378)
- [119-s-1748: Kids Online Safety Act](https://policyrisk.com/legislation/119-s-1748)
- [119-s-4726: PEACE in Sudan Act](https://policyrisk.com/legislation/119-s-4726)
- [119-s-4065: STAND with Taiwan Act of 2026](https://policyrisk.com/legislation/119-s-4065)
- [All bills in Congress](https://policyrisk.com/legislation)

Source: PRIA, https://policyrisk.com/legislation/119-s-695 (as of 2025-12-21).