US SB695

Reduces the required holding period for qualified small business stock (QSBS) capital gains exclusion from more than 5 years to at least 3 years, with a phased exclusion rate: 50% for 3 years, 75% for 4 years, and 100% for 5 or more years

Allows investors to "tack" the holding period of convertible debt instruments when converted to stock, meaning time holding the debt counts toward the QSBS holding requirement

Extends QSBS eligibility to S corporations in addition to C corporations, with active business requirements applied at the corporate level

Removes the alternative minimum tax (AMT) preference item treatment for QSBS gains on stock acquired after enactment, while preserving existing treatment for stock acquired before the Creating Small Business Jobs Act of 2010

Applies to stock and convertible debt instruments acquired after the date of enactment