As a manager of an Investment Fund, it is imperative to know both what the tax implications may be for investments you’re considering entering and tax treatment of gains for your Limited Partners as they are sure to ask you. QSBSExpert is here to help! Which Portfolio Companies … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform The QSBS exclusion is $10M or 10x the initial investment for each QSBS issuer whether you are married or not. Under Section 1202(b) if the taxpayer is married but filing jointly … Read More
A tiered partnership involves an upper-tier, the parent or holding company, and a lower-tier, the subsidiary. Generally, the partners of the parent company will have pass-through income or losses from the subsidiary that passes through the parent. For tax purposes, the partners of the parent company are … Read More
Under IRS Top No. 409 a taxpayer has a capital gain for the amount received over the adjusted basis of their exchanged property. This gain could be short or long-term depending on the holding period. Section 1202 states "the adjusted basis of any property contributed to the … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform The IRC Section 1202 does not explicitly address transfers to trusts, but it can be implied that if the QSBS transfer is considered donative the QSBS will maintain its holding period … Read More
Partnerships can elect the Section 1045 rollover, but there are some nuances between various situations in terms of who has the authority to purchase replacement QSBS. The IRS has laid out detailed guidelines over the treatment of the Section 1045 rollover for partnerships. The guidelines are summarized … Read More
Section 1202(f) states "If any stock in a corporation is acquired solely through the conversion of other stock in such corporation which is qualified small business stock in the hands of the taxpayer then (1) the stock so acquired shall be treated as qualified small business stock … Read More
A Section 368 tax-free E reorganization or recapitalization can involve various structures, but the most commonly used structure for QSBS is a stock for stock exchange or assets for stock exchange. The tax-free reorganization will defer any gains recognized at the time of the sale until the … Read More
Under Section 1202(h)(4) the holder of QSBS can exchange their stock for other QSBS or non-QSBS stock when electing Section 351(a). Section 351(a) allows the holder to conduct a tax-free transaction, exchanging either corporate stock or property. Immediately after the exchange, the company issuing new stock in … Read More
Under Section 1202(a)(1) QSBS can be owned by any entity other than a C Corporation. Therefore, a trust, S Corporation, Partnership, or individual can own QSBS. The share gain of the gain received in the sale of QSBS can not exceed the interest that the shareholder, partner, … Read More