Qualified Small Business Stock Rules Deserve Big IRS AttentionNovember 27, 2023 – Article
Zack Nolan, Corporate & Tax attorney, authored, "Qualified Small Business Stock Rules Deserve Big IRS Attention" in Bloomberg Tax.
Section 1202 of the tax code is a little-known secret that offers substantial benefits for investments in small businesses, including tax-free gains on the sale of qualified small business stock, or QSBS, up to the greater of $10 million or 10 times the investment basis.
But to reap these rewards, taxpayers must navigate a complex and vague set of rules. There are ambiguities and potential pitfalls in the significant redemption rule of Section 1202(c)(3)(B) that could inadvertently penalize early-stage entrepreneurs.
The IRS should clarify the rules in this subsection to align its application with the purpose that Congress intended for it.
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