IRC Section 1202 Under New Tax Law: Tax Treatment and Benefits of Qualified Small Business Stock

QSBS Post-Tax Reform, Eligibility Requirements, Exclusion of Gain, Limitations, Rollovers and More

This program has been cancelled

A live 110-minute CPE webinar with interactive Q&A


Thursday, June 7, 2018

1:00pm-2:50pm EDT, 10:00am-11:50am PDT


This CLE/CPE webinar will provide tax counsel and advisers with guidance on the tax treatment and benefits of IRC Section 1202 qualified small business stock (QSBS) under the new tax law. The panel will discuss the eligibility requirements under Section 1202, the gain exclusion rules, tax deferral provisions contained in Section 1405, and tax planning opportunities for qualified small businesses.

Description

Under IRC §1202, a taxpayer may exclude the gain from a sale of QSBS from taxes. In combination with recent tax law changes, tax advisers must consider the benefits of IRC §1202 for choice-of-entity planning purposes.

IRC §1202 provides favorable tax treatment for gains on the sale of stock of a C corporation. A shareholder can sell the stock and exclude 100% of the gain up to the greater of (1.) $10 million in the aggregate for all sales by the holder, or (2.) 10 times the aggregate adjusted basis of QSBS disposed of by the holder during the tax year. The taxpayer must have acquired the stock after Sept. 27, 2010, held it for at least five years, and it must qualify as QSBS.

In addition to IRC §1202, there are other tax incentives attached to QSBS. IRC §1045 allows taxpayers non-recognition treatment for gain on any sale of QSBS when the proceeds are rolled over into another QSBS. Meeting the requirements under IRC §1045 provides for the deferral of tax on the gain arising from the sale of the existing business.

Tax professionals and advisers must have an understanding of the complex requirements of IRC §§1202 and 1405 to take advantage of significant tax savings for shareholders of QSBS.

Listen as our panel provides guidance on the benefits of IRC §1202 treatment after tax reform, the gain exclusion rules, tax deferral under IRC §1405 and planning opportunities in light of tax reform.

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Outline

  1. Tax treatment of QSBS under Section 1202
  2. Meeting the requirements for gain exclusion
  3. QSBS rollovers under Section 1405
  4. Tax planning opportunities and recent changes for QSBS

Benefits

The panel will review these and other critical issues:

  • What are the rules regarding which entities can issue QSBS?
  • Who can take advantage of the favorable tax treatment under IRC §1202?
  • What are the reporting requirements for sale of QSBS?
  • What are the mechanics of a QSBS rollover?
  • What are the planning opportunities available for using QSBS?

Faculty

Karachale, Christopher A.
Christopher A. Karachale

Partner
Hanson Bridgett

Mr. Karachale advises individuals and business entities on a broad range of tax planning and tax controversy matters....  |  Read More

Valentine, Paul
Paul J. Valentine

Member
Jennings Strouss & Salmon

Mr. Valentine is a member of the firm’s tax practice. His practice emphasizes structuring corporate, partnership...  |  Read More

Mills, Darren
Darren J. Mills, Esq., CPA, ChFC, CLU
Widerman Malek

Mr. Mills has more than 20 years of experience advising both middle market companies and large multi-nationals...  |  Read More

Dyer, Ralph
Ralph Dyer

Atty
Widerman Malek

Mr. Dyer practices primarily in the areas of corporate and business law, including corporate formation, mergers and...  |  Read More