The 1202 QSBS Tax Exemption

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?

1. It allows for the exclusion of capital gains up to $10 million or 10X the adjusted basis 
2. It only requires a five-year minimum hold on investment.
3. 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.