Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform Simple Agreements for Future Equity, otherwise known as SAFEs, exist thanks to the startup accelerator Y-Combinator’s 2013 innovation. With a SAFE, an investor makes a cash investment in a company, but the … Read More
United States Tax Court, Nos. 930–07, 1384–07, 13303–07, 29011–08, 29090–08, January 19, 2012 KEY QSBS TAKEAWAY(S): In Owen v. Commissioner, the taxpayer met the 60–day requirement of section 1045(a)(1) because the stock purchase agreement transaction was signed on June 17, 2002, and the sold Family First Companies shares--amounting to … Read More
United States Tax Court, No. 17291–07, February 1, 2010 KEY QSBS TAKEAWAY(S): In Natkunanathan v. Commissioner, the taxpayer misused the definition under §1202(f) and argued stock options are equivalent to the sale or exchange of stock. Another key takeaway is the taxpayers failure to provide evidence that the … Read More
United States Tax Court, No. 3769-10, August 30, 2012 KEY QSBS TAKEAWAY(S): In Holmes v Commissioner, the taxpayer provided no evidence to demonstrate that they received the shares at original issuance (required as per IRC §1202(c)(1)(B)), and therefore failed to substantiate that their stock holdings qualified as QSBS. … Read More
The Washington State Legislature passed a bill this April that issued a capital gains tax on individual state residents. Historically, Washington’s non-existent state income tax carried over into capital gains meaning Washington investors paid zero state tax on the sale of long-term stock. When the new 7% … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform Federal QSBS Exclusions and State Tax Implications Allowing capital gains tax exclusions for Qualified Small Business Stocks (QSBS) encourages investment in US small business. QSBS laws help provide capital for these businesses … Read More
On September 25, 2014, the IRS released Private Letter Ruling (PLR 201436001), addressing whether a corporation operating in the pharmaceutical field meets the Section 1202 / QSBS criteria of being a “Qualified Trade or Business”. The company in question in this PLR: works with pharmaceutical clients to commercialize experimental … Read More
On April 9, 2021, the IRS released Private Letter Ruling (PLR 202114002), addressing whether a corporation operating in the insurance field meets the Section 1202 / QSBS criteria of being a “Qualified Trade or Business”. The company in question in this PLR: helps customers obtain property, casualty, surety, personal, … Read More
Can I ask the IRS if my company qualifies as a Qualified Small Business? Taxpayers can seek guidance from the IRS to determine whether their company or a company in which they are a shareholder meets the definition of a Qualified Small Business (QSB). This would involve requesting … Read More
If there was a simple “yes or no” equation for this question, this would be a very short article. The reality is more complex, since individual circumstances will impact how companies handle QSBS-related requests. Because both the company and the individual shares held need to qualify, this … Read More