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.
Early-Stage Valuation and QSBS (5/21/2023) - In a recent article about the state of pre-seed valuation, Brett Calhoun of ScaleVC discusses the challenges of valuing pre-seed startups and how to avoid overvaluation. Calhoun notes that pre-seed startups are often overvalued because they have little to no track record and are therefore difficult to assess. Additionally, Calhoun warns that pre-seed investors may… Read More Preserving QSBS During Banking Turmoil (5/10/2023) - Upon the collapse of Silicon Valley Bank, First Republic Bank and other banks during 2023, many companies moved cash which may pose risks for QSBS eligibility in various ways. Excess Cash or Other Holdings (perhaps from drawing down on lines of credit) may cause a company to fail the Active Business requirement whereby at least… Read More QSBS Legislation Seeks to Expand Access to QSBS Benefits (4/20/2023) - Qualified Small Business Stock (QSBS) provides a great incentive to fuel innovation in the US, by providing eligible shareholders with an up to 100% capital gains tax exclusion. QSBS helps to drive capital to endeavors that are “too risky” for many to fund, but such early-stage businesses have consistently had a disproportionate impact on economic… Read More Is QSBS litigation “about to get big”? (4/16/2023) - In a TaxNotes article from April 10, 2023, Nathaniel S. Pollock of SouthBank Legal examines recent litigation involving QSBS and notes that the case may be the "tip of the QSBS litigation iceberg". To date, QSBS litigation and other rulings have been limited to few cases, a handful of Private Letter Rulings and one Chief… Read More Did Trump Claim QSBS in his Tax Returns? (12/21/2022) - The House Ways and Means Committee released former President Donald Trump’s tax returns for 2015 – 2020 on December 30, 2022 - see the returns in the Attachment E link here. We wondered whether Trump claimed QSBS on any investment gains during these years? Where to look? There are two key schedules where an individual… Read More 89% of Americans Feel The US Should Do More to Incentivize Small Businesses (5/10/2022) - Small businesses and startups create new markets and transform old ones, inspiring competition, driving innovation, and creating the job growth essential to growing the US economy. However, only 20-30% of early-stage tech startups succeed and most individuals willing to invest in these companies lose their money for the potential to collect on the significant tax… Read More Claim Your QSBS Gains With Confidence This Tax Season in 3 Steps (4/13/2022) - Did you know gains on your stock may be 100% tax exempt? Qualified Small Business Stock (QSBS) is a tax provision (IRC Section 1202) that incentivizes capital investments in strategic innovation sectors to boost economic growth. QSBS can provide eligible investors up to a 100% capital gains tax exclusion if qualifying criteria are met –… Read More Does Knowledge of Tax Incentive Eligibility Drive Investor Behavior? (4/6/2022) - A unique tax provision, IRC Section 1202 “Qualified Small Business Stock (QSBS)”, was created to incentivize risky capital investments in the innovative startup and early-stage business marketplace in the United States. In the same manner that QSBS tax incentives jumpstart the US national economy and generate strategic job creation, similar tax relief incentives are available… 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.