It hasn’t been talked about a lot, but the Qualified Small Business Stock (QSBS) tax exemption is a great one to look into. Let’s keep it simple.
The QSBS exemption came about as part of the Revenue Reconciliation Act of 1993 as a way to promote investment in small business and startup ventures, the heart of the American economy. So, what does it do for investors?
- It allows for the exclusion of capital gains up to $10 million or 10X the adjusted basis
- It only requires a five-year minimum hold on investment.
- It’s possible to rollover QSBS, deferring capital gains taxes on the sales of QSBS if proceeds from the sale are reinvested in another eligible QSBS within a specific time frame.
With such big tax incentives and such a short time frame, the potential returns make this a risk worth considering. To take advantage, all you have to do is invest in a qualified company. To learn more, contact us today.
