In a word, no. Even if Build Back Better passes (and there is no guarantee that it will), QSBS will still remain in place, albeit with a few changes.
However, specific QSBS stakeholders may be affected. First off, taxpayers a) earning less than $400K in gross adjusted income, and b) holding Section 1202 QSBS will unlikely be impacted. The previously allowed exemption levels will hold true for shareholders under the annual income threshold and the 100% exemption will remain safe.
By comparison, individuals that DO earn more than $400K (in gross adjusted income) will be eligible for an exclusion of up half of the capital gain on the sale of any qualified stock. For the first time, gross adjusted income will be a necessary calculation in determining Qualified Small Business Stock tax savings.
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.
