Section 1045 states that any "gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds the cost of any QSBS purchased by the taxpayer during the 60-day period beginning on the date of such sale, reduced by any portion … Read More
The new QSBS corporation and the investor must meet all of the same requirements on the QSBS checklist as the original QSBS. There is one exception to the active trade or business test. The QSBS purchased through a Section 1045 rollover only has to meet the active … Read More
Section 1045(a)(1 & 2) explicitly states that the reinvested QSBS gain is limited to the cost of the new QSBS minus the cost of the original QSBS. If $1 million in QSBS was purchased in 2015 but was sold for $5 million in 2018 there would be … Read More
Section 1045 rollover for the deferral of QSBS gains has to meet the 60-day requirement. When convertible notes are acquired they are considered debt securities because it is a hybrid debt and equity, acting as interest-bearing debt until the note is converted to equity on the conversion … Read More
Combining the benefits of the Section 1202 capital gains tax exclusion and Section 1045 rollover gain nonrecognition can formulate the rocket fuel needed to boost your tax savings vehicle. Under Section 1202 a taxpayer is allowed a tax exclusion of $10 million or 10x the initial QSBS … Read More
Section 1045(a)(1) says the cost of "any QSBS purchased by the taxpayer" will reduce and defer the realized gain. Therefore, the seller of QSBS can make multiple investments within the 60 day period. As a Section 1045 rollover strategy, multiple investments allows the taxpayer to spread their investment risk … Read More
A holder of QSB stock will lose their Section 1202 capital gain exclusion if the stock is sold under five years unless it is rolled into another QSBS qualifying corporation. If the stock was held for over six months the QSBS seller can elect to take a … Read More