QSBS stands for “Qualified Small Business Stock” and is regulated by the Internal Revenue Service (IRS) under code Section 1202, offering tax benefits to accredited investors, investment funds, employees, and founders. QSBS is a tax benefit on a federal and in some cases also extends to a … Read More
Illinois has officially changed its treatment of Qualified Small Business Stock (QSBS), marking an important development for founders, investors, and business owners with Illinois tax exposure. For years, Illinois generally followed the federal treatment of Section 1202, meaning taxpayers who qualified for the federal QSBS exclusion could often … Read More
A recent article by Joe Wallin on The Startup Law Blog highlights an important point that many founders and investors overlook: reaching the five-year QSBS mark does not lock the tax benefit in place. As Wallin explains, the active business requirement continues for "substantially all" of the … Read More
A tax planning strategy that has become increasingly popular among startup founders and venture investors is now squarely in the crosshairs of the U.S. Treasury Department and the IRS. According to a new Wall Street Journal report, federal officials are preparing guidance aimed at limiting "trust stacking"—a strategy … Read More
Qualified Small Business Stock (QSBS) has evolved from a niche tax incentive primarily associated with venture-backed startups into a planning opportunity being considered by business owners across a variety of industries. Ben Steverman's recent Bloomberg article highlights the growing popularity of Section 1202 and the increasing number … Read More
An artist can sell out tours, launch a successful merchandise brand, and build a loyal audience, yet still miss out on one of the most valuable tax incentives available to founders and early investors. That is the central message of Jared Brenner's Forbes article, which makes a … Read More
The warning from Treasury was unusually direct. Kenneth Kies, Treasury assistant secretary for tax policy and acting IRS chief counsel, left little doubt about the government’s posture when he said, “Let me just warn you: We don’t like stacking,” adding, “Just keep an eye out for that.” At … Read More
Treasury is “working diligently” on regulations tied to the Qualified Small Business Stock (QSBS) gain exclusion under Section 1202, according to Bloomberg Tax. Treasury attorney-adviser Evan Adams said at the American Bar Association Tax Section’s May meeting that both the scope and timing of the project remain … Read More
A recent Tax Notes piece by Manoj Viswanathan of the University of California College of the Law, San Francisco argues that the current system for claiming the Qualified Small Business Stock exclusion places too much responsibility on the wrong party. Rather than requiring shareholders to prove Section … Read More
Qualified Small Business Stock is often described as one of the most powerful tax incentives available to founders and early-stage investors. But as a recent FBT Gibbons article by Scott W. Dolson makes clear, Section 1202 planning can become far more complicated when a corporation has any … Read More