Pulmonx is a commercial-stage medical technology company that provides minimally invasive treatment for patients with severe emphysema, a form of COPD. Pulmonx is the maker of the Zephyr® Endobronchial Valve, which was granted breakthrough status and approved by the FDA in June 2018.
Please note, it is important to assess the company’s business activities against Section 1202(e)(3) which specifies certain industries that are not considered a “qualified trade or business.”
A C corporation is a qualified legal entity for QSBS.
1998
Exemption Level
If shares were acquired after August 10, 1993, but before February 17, 2009, shares could be eligible for up to a 50% tax exclusion if the other QSBS criteria are met. If shares were acquired after February 17, 2009, but before September 27, 2010, shares could be eligible for up to a 75% tax exclusion if the other QSBS criteria are met. If shares were acquired after September 2010 shares could be eligible for up to a 100% tax exclusion if the other QSBS criteria are met.
Any individual owning stock purchased or received directly from the company could potentially be eligible for the QSBS capital gains tax exclusion or the Section 1045 gain rollover if the QSBS standards as per IRC Section 1202 were met at the time of issuance.
In order to assess whether stock issued previously may qualify, the Company would also have to have not taken actions that invalidate QSBS status such as a certain level of redemptions, and would have to satisfy the active business requirement.
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Validate QSBS EligibilityThis article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.