Section 1045(a)(1 & 2) explicitly states that the reinvested QSBS gain is limited to the cost of the new QSBS minus the cost of the original QSBS. If $1 million in QSBS was purchased in 2015 but was sold for $5 million in 2018 there would be … Read More
One of the main requirements of electing the Section 1045 rollover is that the original QSBS has to be held for at least 6 months. After the stock has been held for 6 months at anytime the QSBS holder can sell the stock and rollover the full … Read More
Under Section 1045(a)(1) the QSBS gains have to be reinvested within 60 days of the sale of the QSBS into new QSBS stock. Although it has to be reinvested in 60 days the seller is not limited to one investment and is not limited to the amount … Read More
Section 1045(a)(1) says the cost of "any QSBS purchased by the taxpayer" will reduce and defer the realized gain. Therefore, the seller of QSBS can make multiple investments within the 60 day period. As a Section 1045 rollover strategy, multiple investments allows the taxpayer to spread their investment risk … Read More
Section 1045 of the tax code allows holders of Section 1202 QSBS to roll over their investments into a new QSBS investment if the QSBS is sold before the five year holding period has come to fruition. After the sale, to roll the Section 1202 gains … Read More
Under Section 1202 there are no requirements for applying for QSBS the day stock is purchased or keeping records over the course of the holding period. Even though you do not have to keep records while holding the QSBS you should. It would be maniacal to try … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform What even is this so called SAFE note? A "SAFE" note stands for simple agreement for future equity. SAFE notes were invented by the famous Silicon Valley accelerator fund Y Combinator. Since … Read More
Under Section 1202(h)(1) inherited QSBS is considered a tax-free transfer, which maintains QSBS qualification to the transferee. If the inherited stock qualified for QSBS when it was acquired by the precedent holder than the stock will qualify for section 1202 QSBS. The transferor's holding period and basis … Read More
Contingent payments can be ambiguous, which causes headaches for transaction tax planning. A few examples of contingent payments are (i) fixed installment payments if a certain level of earnings is met or (ii) contingent payments based on a percentage of the operating cash flow over the next … Read More
The tax code does not directly say if you make a second stock acquisition in a non-QSB stock that it will not affect your first stock's QSBS qualification, but the two purchases will be treated as mutually exclusive. Even if the second stock did qualify for section … Read More