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.
Are There Any Tax Benefits Coming to the Middle Class?
Are There Any Tax Benefits Coming to the Middle Class? Now that the president and his administration have announced their plans for an overhaul to our nation’s tax system and code, most taxpayers are wondering how it will affect them. While there are many reports that the nation’s wealthiest will get even wealthier, thanks to…
Top Careers for Working Parents
Top Careers for Working Parents Let’s face it, being a parent is a tough job. Long hours, no holidays or vacation days, and the pay is anything but spectacular. Of course, parenting has some great rewards, and most parents wouldn’t trade those intangible benefits for anything. However, the reality is most parents struggle to figure…
Trump Administration Proposes Sweeping Tax Cuts
After months of promises, a brutally combative campaign and election, and the first 100 days in office, President Donald Trump and his administration have released their tax plan, which promises to include “the biggest tax cut” in the history of our country, according to Treasury Secretary Steven Mnuchin and National Economic Council Director, Gary…
Don’t Let These Common Misunderstood Tax Facts Hurt You
Don’t let these common misunderstood tax facts hurt you. So how much do you know about taxes? Or more importantly, how much do you think you know? There are a lot of tax facts out there, and just as many tax misconceptions. Unless you’re a tax professional, chances are there are a lot…