![Qualified Small Business Stock: One Of The Code’s Most Significant (And Often Overlooked) Tax Breaks](https://www.taxconnections.com/taxblog/wp-content/uploads/JASON-FREEMAN-JD-178.jpg?resize=90%2C90&ssl=1)
Section 1202 offers a once little-known exclusion from income for gain on qualified small business stock (“QSB stock”). The provision has undergone substantial revisions over the years and came back into vogue as a result of the Tax Cuts & Jobs Act. Where applicable, section 1202’s exclusion offers a substantial and legitimate tax shelter: The exclusion of potentially all of the gain on QSB stock held for more than five years.
Section 1202 of the Internal Revenue Code allows a taxpayer (other than a corporation) to exclude a percentage of gain from the sale or exchange of qualified small business stock held for more than 5 years. The exclusion is subject to a number of intricate requirements. But where applicable, the exclusion provides one of the Code’s most significant tax breaks.
Section 1202
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