If the stock was acquired directly from the qualifying QSBS corporation at the original issue, the acquisition date for QSBS purposes is the purchase date. However, the acquisition date for QSBS purposes varies if the QSBS was received in another way, such as compensation for services performed, … Read More
If a taxpayer’s capital gains exceed the QSBS limitations, the gain above the limitation will be subject to capital gains taxes at a maximum rate of 28%. Additionally, the additional gains could be subject to Net Investment Income Tax (NIIT) of 3.8% for high earning taxpayers. As an example, ABC, Inc. issued $2 … Read More
In addition to capital gains taxes, if an individual’s income exceeds a certain threshold they will also be subject to a Net Investment Income (NIIT). NIIT is an additional 3.8% tax on certain net investment income of individuals and certain trusts or estates who meet a Modified Adjusted Gross Income … Read More
The long-term (assets held over 12 months) capital gains tax rates during 2020 are: Capital Gains Tax Bracket 0%: Income between $0 – $39,37515% : Income between $39,376 – $434,55020%: Income over $434,55028%: Maximum Tax Rate on Section 1202 QSBS Gains that are not excludable More on calculating your QSBS exclusion 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
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