An investor can make a follow-on investment in a section 1202 C Corporation, but the second investment will have a new timeline, which starts on the day of the issuance of the QSB stock. Also, the second investment will still have to follow the same guidelines as the first investment. Therefore, the corporation at all times can never have an aggregate basis of assets over $50 million before and immediately after the investment. If the prior issued stock is sold first and there are capital gains excluded with Section 1202 then the second round of issued stock will be limited to $10 million minus the gains already taken, but the 10x cap is not affected.

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