What Does Build Back Better Mean for Company Founders?

Startups need capital, therefore, startups need investors. As a result, startups (and their founders) absolutely LOVE qualified small business stock. Compared to an investment in an index fund or a publicly traded company, an investment in a small business has the potential to generate a return with much lower taxes.

At QSBSExpert, we talk to company founders on a daily basis, and we’re hearing a lot of worry about Build Back Better. And yes, Build Back Better (if it passes) will reduce the impact of QSBS for SOME investors. Taxpayers who earn more than $400K in gross adjusted income will only be eligible to exclude 50% of their capital gain on the sale of qualified stock. Meanwhile, taxpayers who earn less than $400K will likely not see an impact to QSBS.

Even with these proposed changes, QSBS remains a very attractive reason to invest in small companies.
CapGains Inc. is following this legislation closely and is forming a coalition to stay abreast of developments – keep up to date here.

This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.

About QSBS Expert

QSBS Expert was founded by a group of entrepreneurs, investors, accountants and lawyers who came together when trying to navigate a QSBS situation of their own. We quickly realized that the regulations left a lot of open questions and the publicly available information was confusing to sift through…so we thought that others may also benefit from having a “go to” resource for all things QSBS.