Many companies are asked to represent that their stock qualifies as QSBS before the stock is issued. If so, there may be a clause in your “Stock Purchase Agreement” or related purchase documents where the corporation stated that:
“aggregate gross assets, as defined by Section 1202(d)(2) of the Code, at no time between the date of its incorporation and the Closing, have exceeded U.S. $50 million, taking into account the assets of any corporations required to be aggregated with the Company in accordance with Section 1202(d)(3)of the Code.”
If there is no such clause in your purchase agreement, it may be best to inquire with the Company and gather information such as the Company’s fundraising history, and if possible historical balance sheet, tax returns, and company reports to develop a timeline of the Company’s gross assets to help support your assertion that the Company satisfies the Gross Asset test.
More on the “Gross Assets” Tests
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.
