to read as follows: (A) the applicable percentage under paragraph (1) shall be 100 percent, and . (5) Section 1202(b)(2) of such Code is amended by striking more than 5 years and inserting at least 3 years . (6) Section 1202(g)(2)(A) of such Code is amended by striking more than 5 years and inserting at least 3 years . (7) Section 1202(j)(1)(A) of such Code is amended by striking more than 5 years and inserting at least 3 years . (e) Effective date (1) In general Except as provided in paragraph (2), the amendments made by this section shall apply to stock acquired after the date of the enactment of this Act. (2) Continued treatment as not item of tax preference The amendment made by subsection (c) shall take effect as if included in the enactment of section 2011 of the Creating Small Business Jobs Act of 2010. 3. Tacking holding period of convertible debt instruments (a) In general Section 1202(f) of the Internal Revenue Code of 1986 is amended— (1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B) and moving such subparagraphs (as so redesignated) 2 ems to the right, (2) by striking conversion of other stock .—If any stock and inserting the following: conversion.— (1) Other stock If any stock , and (3) by adding at the end the following new paragraph: (2) Convertible debt instruments (A) In general If any stock in a corporation is acquired by the taxpayer, without recognition of gain, solely through the conversion of a qualified convertible debt instrument— (i) the stock so acquired shall be treated as qualified small business stock in the hands of the taxpayer, and (ii) the stock so acquired shall be treated as having been held during the period during which the qualified convertible debt instrument was held. (B) Qualified convertible debt instrument For purposes of this paragraph, the term qualified convertible debt instrument means any bond or other evidence of indebtedness— (i) which is originally issued by the corporation to the taxpayer, (ii) the issuer of which— (I) from issuance until