Efforts are underway to advance American innovation through the expansion of QSBS, but more voices are needed to preserve the current legislation!
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What’s the change?
H.R.1199 reintroduced on February 11, 2025 by Representative David Kustoff, would modernize and strengthen IRC Section 1202 (QSBS) by adapting the tax provision to the current business environment, encouraging innovative financing methods and not penalizing corporations that began as “small business” S-corporations or achieved successful outcomes quickly.
See this Press Releasefor more information.
CapGains Inc. joins the Americans for Tax Reform (ATR), Angel Capital Association (ACA), U.S. Chamber of Commerce, Small Business & Entrepreneurship Council (SBE) Council, Engine, Financial Technology Association, National Venture Capital Association (NVCA) and Carta in support of the bill, however broadening the coalition can help see this bill gets enacted.
What does this mean?
If enacted, more types of investments and investors could qualify as QSBS. These tax changes could have a significant impact on entrepreneurs and certain investors in the types of innovative companies driving tomorrow’s economy.
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This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.