Venture Capital Tax Act of 1979

Venture Capital Tax Act of 1979 - Amends the Internal Revenue Code to increase the corporate surtax exemption to $100,000 (except for certain controlled corporations).

Provides for the nonrecognition of gain from the sale or exchange of qualified new business stock, but only to the extent that such gain does not exceed the cost of qualified new business stock purchased by the taxpayer within one year of the date of the original sale. Defines "qualified new business stock" for the purposes of this Act. Reduces the basis of such stock by the amount of gain which is not recognized.

Permits stock options granted by unaffiliated small business corporations which have not been in existence for seven years and which qualify for deferral of gain from the sale of their stock under this Act to qualify for the preferential tax treatment granted to holders of stock options under the Internal Revenue Code.

Increases to $50,000 ($100,000 for married individuals filing jointly) the amount of loss on small business corporation stock which may be treated as ordinary, rather than capital, loss in any taxable year. Increases capitalization limits for the purpose of defining small business.