Purchasing existing stock or assets in a company does not qualify as qualified small business stock (QSBS). QSBS has to be newly issued stock and qualify as a Section 1202 qualified small business. Refer here for details on what constitutes a qualified small business.
Section 1202 of the tax code does not say whether or not a holding company or blocker corporation would disqualify the target company stock. It may be possible that a holding company that owns a qualified small business(es) is operating as a qualified small business through its subsidiaries.
Possible strategies could include:
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.