Alaska does not have a state income tax for individuals; therefore, if you receive capital gains in Alaska there is no tax regardless if Section 1202 100% tax exclusion on capital gains from the sale of QSBS applies. Capital gains on the sale of QSBS will not only be excluded from … Read More
Alabama does not offer a tax exclusion for investing in QSB stock. Although Alabama does not offer the QSBS tax exclusion, under the Alabama Jobs Act, Act 2015-27 there is a tax credit up to 1.5% annually of a qualified capital investment in a qualifying project. The tax credit … Read More
A holder of QSB stock will lose their Section 1202 capital gain exclusion if the stock is sold under five years unless it is rolled into another QSBS qualifying corporation. If the stock was held for over six months the QSBS seller can elect to take a … Read More
An investor can make a follow-on investment in a section 1202 C Corporation, but the second investment will have a new timeline, which starts on the day of the issuance of the QSB stock. Also, the second investment will still have to follow the same guidelines … Read More
The aggregate gain from sales of QSBS eligible stock issued by any corporation is subject to limits specified in IRC Section 1202(b). Each year that a shareholder sells QSBS, the total gain that may be taken into account for each issuing corporation is limited to the greater of: $10 million … Read More
In order to qualify as a “Qualified Small Business”, Section 1202 requires that the corporation to be in a “qualified trade or business.” The general intent of the QSBS tax exclusion is to incentivize investment in entrepreneurship of innovative companies to help drive future economic growth. Example of … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform In order to qualify as a “Qualified Small Business”, Section 1202 requires the stock to meet the “Gross Asset” test, whereby the “aggregate gross assets” of the corporation: Did not exceed $50 … Read More
A tax-free stock transaction happens when stock is transferred or exchanged without realizing any gains on the stock. A few examples of tax-free transactions that maintain QSBS status are (i) gifted stock, (ii) stock inherited after a death, whether through an estate or other means, (iii) from … Read More
As noted in this article, the QSBS tax exclusion has increased several times since first implemented in 1993. Therefore, “when” QSBS was acquired impacts the magnitude of the potential tax exclusion. Additionally, “how” the QSBS was acquired impacts whether or not the stock is eligible for QSBS … Read More
The Qualified Small Business Stock (“QSBS”) tax exclusion is one of many incentives the US Federal government has enacted to encourage founding and investing in new businesses. This exemption can be significant, with up to a benefit of approximately $2 million per taxpayer per investment (based on the … Read More