QSBS stands for “Qualified Small Business Stock” and is regulated by the Internal Revenue Service (IRS) under code Section 1202, offering tax benefits to accredited investors, investment funds, employees, and founders. QSBS is a tax benefit on a federal and in some cases also extends to a … Read More
IRS audit activity regarding QSBS seems to be on the rise. During Q1 2024 we have seen multiple taxpayers receive requests for information, had QSBS claims rejected by the IRS and / or cases have gone to trial. Has the IRS challenged or rejected your QSBS claim? Let … Read More
IRS audit activity regarding QSBS seems to be on the rise. During Q1 2024 we have seen multiple taxpayers receive requests for information, had QSBS claims rejected by the IRS and / or cases have gone to trial. Has the IRS challenged or rejected your QSBS claim? Let … Read More
A recent U.S. Court of Federal Claims decision, Ju v. United States, has highlighted the importance of meticulous recordkeeping for taxpayers seeking to exclude capital gains from the sale of qualified small business stock (QSB) under Section 1202. Section 1202 offers a significant tax exclusion to incentivize innovation: … Read More
In December 2023, the Venture Capital Journal examined whether 2024 would be the year of VC secondaries. A confluence of factors makes the timing ripe for such deals, and the expected deal activity is already panning out. Secondary transactions are typically transacted at discounts to the fair market … Read More
IRC Section 1202 offers little guidance as to what is meant by certain excluded trades or businesses outlined in Section 1202(e) - such as “health services”, “consulting”, “engineering”, etc. As such, shareholders wondering whether the company they hold stock in is in a Qualified Trade have sought … Read More
The US tax landscape could be undergoing a significant shift with the proposed "Tax Relief for American Families and Workers Act of 2024", announced by House Ways and Means Committee Chairman Jason Smith and Senate Finance Committee Chairman Ron Wyden and summarized by PwC,. This bipartisan agreement … Read More
On December 29, 2023, the IRS released a Private Letter Ruling (IRS Private Letter Ruling 202352009), addressing whether a corporation that provides interim staffing and executive search services meets the Section 1202 / QSBS criteria of being a “Qualified Trade or Business.” Company Background The company in question specializes … Read More
The Qualified Small Business Stock (QSBS) exclusion is a coveted tax benefit that offers up to 100% tax exemption upon sale. However, entrepreneurs and investors must navigate a critical question: Is their business a "qualified trade or business" under Section 1202 of the Internal Revenue Code? Given the … Read More
On November 17, 2023, the IRS released proposed modifications to Schedule K-1 introducing fundamental changes in how partnerships and their investors report Qualified Small Business Stock (QSBS) gains. QSBS offers an up to 100% capital gain exclusion, and for partnerships who have QSBS gains, these benefits flow … Read More