Companies that are engaged in activities that do not fall under the definition of a Qualified Trade or Business risk eligibility for their stock qualifying as Qualified Small Business Stock (“QSBS”). All is not lost however if a company partakes in some “non-qualified” activities. Provided the value … Read More
According to the Internal Revenue Code Section 1202 (I.R.C. §1202), investors can benefit from a substantial tax advantage through Qualified Small Business Stock (QSBS). Under this section, a complete exemption from federal capital gains taxes on profits gained from the sale of QSBS stock held for a … Read More
If you're a business owner, you may be wondering if converting your business from an LLC to a C-corporation is the right move for you. There are a number of factors to consider when making this decision, including your business's size, its stage of development, and its … Read More
The vagueness of the “Qualified Trade or Business” exceptions listed in Section 1202(e)(3) have troubled “would be” QSBS shareholders and their advisors since the QSBS regulations were first introduced. Additional guidance has mostly come in the way of Private Letter Rulings, the latest of which (PLR 202114002) … Read More
Qualified Small Business Stock is a phrase gaining momentum in the investment community. Although it has been around since 1993, originally signed into law by President Clinton, it has grown over the past decades in both benefits and complexity. The History Behind the Creation of Section 1202 In its … Read More
An integral element of section 1202 of the IRC, which outlines the restrictions and benefits of Qualified Small Business Stock, is §1202(d)(4) where eligible corporations are defined. The section reads: ‘‘eligible corporation’’ means any domestic corporation; except that such term shall not: include—(A) a DISC or former DISC, (B) … Read More
One of the many areas of 26 U.S.C.A. § 1202 that is creating the questions from corporations looking to determine if their company qualifies for the tax exemption falls under Section 1202(e)(3)(A); which broadly states how the IRS defines excluded trades or businesses for the qualification of … Read More
One of the many areas of 26 U.S.C.A. § 1202 that is creating the questions from corporations looking to determine if their company qualifies for the tax exemption falls under Section 1202(e)(3)(A); which broadly states how the IRS defines excluded trades or businesses for the qualification of … Read More
What Exactly is Section 199-A and the Qualified Business Income Deduction (QBID)? In 2017 as part of the Tax Cuts and Jobs Act under the Trump Administration, the Corporate Tax rate was reduced from 35% to 21%. Non-corporate taxpayers now faced a higher comparative tax burden than corporations, … Read More
One of the many areas of 26 U.S.C.A. § 1202 that is creating the questions from corporations looking to determine if their company qualifies for the tax exemption falls under Section 1202(e)(3)(A); which broadly states how the IRS defines excluded trades or businesses for the qualification of … Read More