As an investor taking on risky investments in qualified small businesses you want to maximize your potential gains by leveraging the tax incentives written for you. Your stock may be eligible for a 100% capital gains tax exclusion. QSBSExpert is here to help! What Businesses Qualify for QSBS?Can … Read More
As a manager of an Investment Fund, it is imperative to know both what the tax implications may be for investments you’re considering entering and tax treatment of gains for your Limited Partners as they are sure to ask you. QSBSExpert is here to help! Which Portfolio Companies … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform The QSBS exclusion is $10M or 10x the initial investment for each QSBS issuer whether you are married or not. Under Section 1202(b) if the taxpayer is married but filing jointly … Read More
The purpose of this case study is to give a real-world example of the potential benefits of the Section 1202 qualified small business stock (QSBS) exclusion on a QSBS holder and tax revenue level. Below is the QSBS Company Profile for Beyond Meat ("the Company" or "BM") … Read More
Reporting of the Section 1202 gain depends on (a) the tax form (b) whether it is owned through a pass-through entity, and (c) the timing of payments received from the sale of the QSBS. There are two forms (i) Form 1099-DIV and (ii) Form 2439. If the … Read More
For gains on the sale of stock to qualify for the Section 1202 capital gains tax exclusion, there are two main criteria on a stockholder level, which are (i) how the stock was acquired, (ii) how long the stock has been held, (iii) how the stock was … Read More
Section 1045 states that any "gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds the cost of any QSBS purchased by the taxpayer during the 60-day period beginning on the date of such sale, reduced by any portion … Read More
Section 1202(h)(4) states "the basis of such stock in the hands of the taxpayer shall in no event be less than the fair market value of the property exchanged", meaning that the property exchanged for QSBS is valued at fair market value (FMV) and not historical cost … Read More
Scenario I: QSBS exchanged for QSBS If QSBS was exchanged for other QSBS under a Section 351 transaction or a Section 368 Reorganization than the built-in gain on the transfer is eligible to be deferred under Section 1045 as well as any gain on the sale of the … Read More
Under IRS Top No. 409 a taxpayer has a capital gain for the amount received over the adjusted basis of their exchanged property. This gain could be short or long-term depending on the holding period. Section 1202 states "the adjusted basis of any property contributed to the … Read More