Section 1202 limits working capital that a company may apply towards the 80% test to 50% of total assets, however the question emerges as what assets should be considered to be "working capital" assets for purposes of QSBS? Inventory is typically included as a component of working capital … Read More
President Biden released his budget proposal for the coming 2023 fiscal year on March 28, 2022. Coming off the heels of the stalled Build Back Better Act, will the President try to work elements of the BBBA into the budget? The budget proposes a new … Read More
QSBS Expert Q&A: Stock Redemptions and QSBS Regulations The startup ecosystem and investment landscape are ever-evolving. As new questions develop, the answers and solutions are not far behind. In our monthly series, the QSBS Expert team provides insights into these pressing questions in the highly nuanced realm of … Read More
The startup ecosystem and investment landscape are ever-evolving. As new questions develop, the answers and solutions are not far behind. In a new monthly series, the QSBS Expert team will be providing insight into these pressing questions in the highly nuanced realm of QSBS. Tax season is in … Read More
The vagueness of the “Qualified Trade or Business” exceptions listed in Section 1202(e)(3) have troubled “would be” QSBS shareholders and their advisors since the QSBS regulations were first introduced. Additional guidance has mostly come in the way of Private Letter Rulings, the latest of which (PLR 202114002) … Read More
“Because of this bill, start-ups and small businesses will now have access to a big, new pool of potential investors -- namely, the American people.” - President Barack Obama during the signing of the JOBS Act, April 5, 2012 The Jumpstart Our Business Startups (JOBS) Act paved the way … Read More
Originally designed to encourage investors to help the disadvantaged, the Tax Cuts and Jobs Act was signed into law in 2017. With this law came the creation of Opportunity Zones (OZ), socioeconomic locations identified by the government and designated for new business development with the intention of … Read More
United States Tax Court, No. 2917-63, July 23, 1965 Key QSBS Takeaways: In Bardahl Mfg. Corp. v. Commissioner, the United States Tax Court contended that Bardahl Corporation avoided "the imposition of individual income tax on its shareholders, by permitting its earnings and profits to accumulate instead of being … Read More
A trust is between a trustor (the one who gives the right to hold title to assets/property) and a trustee (the one who receives the title to said asset/property). This situation creates a fiduciary relationship which comes with fiduciary duties, such as: Duty of Care Duty of ConfidentialityDuty of … Read More
The implementation of advanced planning strategies is to: (1) reduce or eliminate capital gains tax; (2) reduce future estate tax; and (3) increase asset protection from creditors and lawsuits should be on every founder, owner, and investor’s mind. All strategies revolve around time and the amount of equity … Read More