What Is Section 1202 Stock?

Business,Man,Deal,Investment,Stock,Market,Discussing,Graph,Stock,Market

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.

Posted in
The Modern NFL Quarterback Market, 3 Views pic2

The Modern NFL Quarterback Market, 3 Views

Written by Ryan Hickman. As we approach the NFL draft, the quarterback market remains volatile.  Many consider Tom Brady to be the greatest football player of all time. Why? As the starting quarterback for the New England Patriots, Brady led their franchise to 6 super-bowl championships before leaving in the 2020 offseason to Tampa Bay…

Five Keys to a Successful Family Business

Five Keys to a Successful Family Business

The Community Leaders of a Family Business (Five Keys to a Successful Family Business) Written by Ryan Hickman. Family businesses have been an essential component of the global economy for centuries. These companies are often characterized by their tight-knit management structures, long-term perspective, and commitment to preserving family values. However, running a family business can…

The Man That Helps People Live their Financial Dreams with Comedy - Charlie Epstein, Host of Yield of Dreams

The Man That Helps People Live their Financial Dreams with Comedy – Charlie Epstein, Host of Yield of Dreams

Introduction (yield of dreams) In this interview, Alan Olsen, CPA, MBA discusses using comedy to help people reach their financial goals with Charlie Epstein, author and principal of Epstein Financial Group, LLC and Epstein Financial Services, a Registered Investment Advisory firm. Transcript: Charlie Epstein My ministry in life is to ease people’s pain and suffering about…

Finding Infinite Freedom with Eric Francom

Finding Infinite Freedom with Eric Francom

Introduction (Eric Francom discusses finding infinite freedom) In this interview, Alan Olsen, CPA, MBA discusses teaching business success with Dr. Eric Francom. Dr. Eric Francom is an Angel Investor, wealth mentor, speaker, podcaster, and author. Transcript: Eric Francom A lot of people invest in stocks and bonds and retail products, but they don’t get into the part of…