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.
The Skinny on Tax-Deferred Retirement Accounts
Just about anyone could benefit from a tax-differed retirement account. These accounts, most commonly known as 401Ks or IRAs, are a great way to save for retirement and in many cases save on taxes. The real question is when do you plan on cashing out that retirement fund? While you will always see immediate savings…
Now Is the Time to Fix California’s Messed up Tax Code
The California tax code is about as healthy as the federal tax code. In other words, it needs a lot of work. Of course, there are many interested parties that are all hard at work trying to create plans that will help improve the state’s economy and tax revenue while helping those from the lower…
Why Taxing the Rich to Help the Poor Doesn’t Work
How many of you remember the Comedy Central game show: “Win Ben Stein’s Money?” The host, Mr. Stein, would challenge his opponents in answering trivia questions and actually give away his own money to those who beat him. That show has long been off the air, but the game show host, turned conservative commentator is…
Toshiba Adds More Units to Accounting Probe After Overstated Profits
Toshiba added more units to accounting probe after overstating their profits. Accounting can be much like taxes and when it comes to businesses the two go hand-in-hand. Getting your accounting right is extremely important. That’s why we recommend using a qualified accounting firm to handle your books. That includes: preparing financial statements, certifying audits, compilations…