Entrepreneurial New and Small Business Capital Formation Act of 1995

Entrepreneurial New and Small Business Capital Formation Act of 1995 - Amends the Internal Revenue Code to recognize, if elected by the taxpayer, gain (other than ordinary income) on the sale of any eligible small business investment only to the extent the amount realized exceeds the cost of any other small business investment purchased by the taxpayer during the previous six months. Applies to the amendments made by this Act rules (from provisions relating to a 50 percent exclusion for gain from certain small business stock) relating to stock conversion, pass-thru entities, transfers, and short positions. Mandates basis reductions for unrecognized gain. Treats a loss on an eligible small business investment, if the loss would otherwise be from the sale or exchange of a capital asset, as an ordinary loss.