Although the initial proposal for President Biden’s Build Back Better Plan included language that would protect QSBS status and benefits, a recent revision of the proposal by the House of Representatives would affect certain taxpayers if passed.
The document titled, General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals stated, “the exclusion under current law for capital gain on certain small business stock would also apply.” However, if the current bill passes, Americans who earn more than $400K in adjusted gross income can expect some changes.
QSBS is not gone and, from our understanding, is unchanged for taxpayers who make less than $400K annually. These individuals would still base their exclusion on the date of issuance of their stock. But for higher earners, the exemption would be capped at 50% rather than the current 100% allowable exemption.
CapGains Inc. is following this legislation closely and is forming a coalition to stay abreast of developments – keep up to date here.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.