In order to qualify as a “Qualified Small Business”, Section 1202 requires that the corporation to be in a “qualified trade or business.” The general intent of the QSBS tax exclusion is to incentivize investment in entrepreneurship of innovative companies to help drive future economic growth. Example of … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform In order to qualify as a “Qualified Small Business”, Section 1202 requires the stock to meet the “Gross Asset” test, whereby the “aggregate gross assets” of the corporation: Did not exceed $50 … Read More
A tax-free stock transaction happens when stock is transferred or exchanged without realizing any gains on the stock. A few examples of tax-free transactions that maintain QSBS status are (i) gifted stock, (ii) stock inherited after a death, whether through an estate or other means, (iii) from … Read More
As noted in this article, the QSBS tax exclusion has increased several times since first implemented in 1993. Therefore, “when” QSBS was acquired impacts the magnitude of the potential tax exclusion. Additionally, “how” the QSBS was acquired impacts whether or not the stock is eligible for QSBS … 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
Only C-Corporations can qualify to issue Qualified Small Business Stock (QSBS) per Section 1202. C-Corporations or “C-Corps” are legal entities in which the owners or shareholders are taxed separately from the entity. C-Corps are taxed on their income before paying out earnings in the form of dividends to … Read More
Not sure if the stock you’re invested in is QSBS, learn more about our QSBS Monitoring Platform The majority of states do allow the QSBS tax exclusion on a state income tax level, but there are some nuances between them. Generally, the three ways that states treat the … Read More
On January 24, 1963, John F. Kennedy quotes, “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential … 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.QSBS Question of the … 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