Qualified Small Business Stock Sales
The tax incentives under I.R.C. Section 1202 provide taxpayers with an opportunity to maximize potential tax savings, while making investment in small businesses more attractive. Historically, Section 1202 has allowed for a 50% exclusion for gains recognized with respect to the stock of qualified small business corporations that are not S corporations.
Legislation enacted in late 2010 once again temporarily increased the exclusion on QSBS to 100% on purchases made after September 27, 2010 and before January 1, 2014. However, in order to realize the benefits afforded under this provision, careful navigation of the many complex rules related to the acquisition and subsequent sale of qualified small business stocks is needed. This provision expired at the beginning of January 2014 and, was subsequently made permanent on December 18, 2015, as part of the passing of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).
In this course, you will learn to:
- Identify what gains are eligible for exclusion under Section 1202
- Define current tax treatment of QSBS
- Recognize pre-issuer limitation on eligible gains
- Calculate a five-year holding period
- Identify operating rules related to pass-through entities
- Determine how to offset short positions and application limitations of Section 1202
Duration: 100 minutes
Who Should Attend: All tax practitioners advising individual and business clients
Course Level: Intermediate
Prerequisite: Basic familiarity with provisions of Section 1202
Advance Preparation: None
Delivery Method: Self Study - Internet Based
IRS CE: UBWMF-T-00224-21-S
Expiration: In accordance with NASBA standards, access to this course will terminate one year from the date of purchase. Incomplete courses will no longer be accessible beyond the one year deadline.
Last Modified: 04/27/2021