What Is Section 1202 Stock?
The Protecting Americans From Tax Hikes Act of 2015 (PATH Act), which was signed into law late last year, finally made several temporary tax breaks permanent. Among the tax breaks included is the Small Business Stock Gains Exclusion, known as Section 1202.
So what is the Small Business Stock Gain Exclusion? Section 1202 is designed to help small businesses, new ventures, and specialized small businesses by encouraging individual investors and investment companies to place their financial backing into these companies. Because these investors are taking a risk by putting their money behind these companies, the Internal Revenue Code offers them relief via Section 1202.
Thanks to the new PATH law, the exclusion of 100 percent of the gain on the exchange or sale of qualified small business stock (QSBS) that has been held for more than five years and which was obtained after September 27, 2010 is now permanent. In addition, the PATH Act also permanently extends the rule that eliminates the 100 percent excluded QSBS gain as a preference item for Alternative Minimum Tax (AMT) purposes.
You can learn a lot more about this important change and about Section 1202, by clicking here. You can also contact us at GROCO if you think that you might qualify for Section 1202. Just call us at 1-877-CPA-2006 or contact us online. We’ll take you through the analysis of the best way to take advantage of this section of the tax code. In addition, many states, including California, have exclusions available, but each state is a little different from the federal requirements, so be sure to contact us to find out how we can help you.
Sales Tax Deduction Option, State and Local
[vc_row][vc_column][vc_column_text] Sales Tax Deduction Option, State and Local The Tax Relief and Health Care Act of 2006 extended the election to deduct state and local general sales taxes for 2006. The act was enacted after Schedule A (Form 1040), Itemized Deductions, and its instructions were printed. Because we were not able to include the instructions…
California Unitary Group of Corporations; Intercompany Distributions; Deferred Gain Tracking
California Unitary Group of Corporations; Intercompany Distributions; Deferred Gain Tracking New Form 3726 – Deadline Extended to 10/15/09 Unitary Groups must do more tracking in some cases. The Franchise Tax Board wants to make sure deferred intercompany gains don’t get lost over the years (and therefore, never taxed), so they are forcing taxpayers to provide…
Top Self Employed Tax Questions
Top Self Employed Tax Questions What is Business Turnover? Sales turnover is the total amount of income a business earns before deducting business expenses. Turnover includes receipts of any kind for goods sold or work done such as commission, tips, payments in kind, fees and insurance proceeds. Include sales turnover in your financial accounts at…
2010 Tax Relief Act creates a 100% writeoff for heavy SUVs used entirely for business: HISTORY REPEATS ITSELF
[vc_row][vc_column][vc_column_text]OLD RULE: A calendar year taxpayer bought a $50,000 heavy SUV in June of 2010 and used it 100% for business in 2010. It may write off $40,000 of the cost of the vehicle on its 2010 return, as follows: … $25,000 expensing deduction (Sec. 179(b)(6) Limit, see below under “History”), plus … $12,500 of…