Venture Capital Gains Act of 1989

Venture Capital Gains Act of 1989 - Amends the Internal Revenue Code to permit both corporate and noncorporate taxpayers an income tax deduction of 25 percent of the gain from an investment in the stock of a small business whose outstanding stock is valued at less than $10,000,000. Allows the deduction only if the taxpayer is the initial acquirer of the particular stock and holds the stock for at least four years.

Taxes corporate gain from such investments at 25.5 percent (rather than at the standard 34 percent rate).

Limits the maximum marginal tax rate on the income from such investments to 21 percent for individual taxpayers.

Adds the amount of the deduction for capital gain from such investments as a tax preference item for purposes of determining alternative minimum tax liability.