QSBS is popping up more and more these days, whether in M&A transactions, IPOs, regulatory changes, politics, entrepreneurship and in many more areas. Here are some of the recent developments we are following.
Does Kamala Harris Support QSBS? (9/4/2024) - Vice President Kamala Harris is set to unveil new tax proposals to support small businesses, and put the Democratic platform into action.. These proposals include a ten-fold increase in the federal government's small business tax deduction from $5,000 to $50,000. The campaign highlighted that this increase is intended to alleviate the significant costs associated with… Read More
Unlocking the Potential of QSBS: A Key to Boosting Startups (9/2/2024) - In today’s global economy, innovation remains on the central stage as the key enabler that leads to growth. Thus, it is important to have legislation that supports these fresh and innovative enterprises. One of the prominent policies in this area is the Qualified Small Business Stock (QSBS), a tax advantage enacted by Congress under section… Read More
Harnessing QSBS for Optimal Returns: Primary Venture’s Co-Founder, Ben Sun (8/21/2024) - Primary Venture Partner’s co-founder, Ben Sun, recently sat down with Samir Kaji (CEO and founder of Allocate) on Samir's Venture Unlocked podcast. Amongst the topics discussed, Sun detailed how QSBS played a role in Primary’s recent secondary sale of one of their portfolios. This discussion gives an insight into how QSBS has become an essential… Read More
Scott Galloway’s Tax Optimization Strategies Unpacked (7/7/2024) - Navigating the intricate world of tax optimization demands a strategic approach to financial management. Scott Galloway, Professor of Marketing at NYU Stern School of Business and co-host of the enlightening podcast "Prof G Markets" with Ed Elson brings a unique blend of academic insight and practical wisdom to the forefront. Beyond his academic accolades, Galloway… Read More
Tax Court Ruling (Ju v. United States) Shows When Claiming QSBS, Documentation is Key (4/8/2024) - A recent U.S. Court of Federal Claims decision, Ju v. United States, has highlighted the importance of meticulous recordkeeping for taxpayers seeking to exclude capital gains from the sale of qualified small business stock (QSB) under Section 1202. Section 1202 offers a significant tax exclusion to incentivize innovation: shareholders who hold QSB stock for more… Read More
Sweetening VC Secondaries with QSBS (3/5/2024) - In December 2023, the Venture Capital Journal examined whether 2024 would be the year of VC secondaries. A confluence of factors makes the timing ripe for such deals, and the expected deal activity is already panning out. Secondary transactions are typically transacted at discounts to the fair market value, however the up to 100% capital… Read More
IRS Halts PLRs on “Active Business” Requirement for QSBS (2/4/2024) - IRC Section 1202 offers little guidance as to what is meant by certain excluded trades or businesses outlined in Section 1202(e) - such as “health services”, “consulting”, “engineering”, etc. As such, shareholders wondering whether the company they hold stock in is in a Qualified Trade have sought clarification from the IRS. The IRS has issued… Read More
IRS Ruling Opens Doors for Service Businesses: Navigating the IRC Section 1202 Gain Exclusion (1/28/2024) - A recent IRS Private Letter Ruling found that a company providing interim staffing and executive search services was engaged in a qualified trade or business and, therefore, eligible for IRC Section 1202 gain exclusion. The ruling, PLR 202352009, stated that the Company, a C corporation that provided interim staffing services and executive searching for its… Read More
R&E (Section 174) Capitalization Relief Could Unearth QSBS Potential (1/24/2024) - The proposed reversal of R&D capitalization under IRC Section 174 offers a QSBS lifeline to shareholders in companies that may have crossed the $50M threshold due to R&E capitalization. Read More
IRS Rules Interim Staffing and Executive Search Company QSBS Eligible: What You Need to Know (1/2/2024) - On December 29, 2023, the IRS released a Private Letter Ruling, addressing whether a corporation that provides interim staffing and executive search services meets the Section 1202 / QSBS criteria of being a “Qualified Trade or Business.” Read More
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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.