As an investor in small businesses, you may be interested in learning more about the IRC Sec. 1202 exclusion. This little-known benefit, enacted in 1993, allows C corporation shareholders to exclude capital gains from the sale of Qualified Small Business Stock (QSBS) from taxation.
Prior to 2013, the benefits of this exclusion were limited, but with the increase of long-term capital gains rates, it has become a more attractive option for taxpayers. The maximum long-term capital gains rate is now 23.8%, making the IRC Sec. 1202 exclusion more valuable than ever before.
At Bright Hill Advisors, we provide comprehensive services to help investors navigate the complexities of IRC Sec. 1202. Our services include eligibility determination, documentation, gain exclusion calculation, procedural requirements assistance, and tax planning, such as entity analysis. We also offer assistance in determining eligibility for the IRC Sec. 1045 tax deferral.
The IRC Sec. 1202 exclusion allows for a 50% to 100% exclusion of capital gains on the sale of QSBS, with the amount eligible for exclusion limited to the greater of $10 million or 10 times the taxpayer’s basis in the QSBS.
If you’re interested in learning more about this valuable benefit, contact Bright Hill Advisors to determine your business’s eligibility for the IRC Sec. 1202 exclusion. Our team of experts can guide you through the process and help you take advantage of this tax-saving opportunity.
Thank you for your continued trust in Bright Hill Advisors.
Best regards,
Moshe Mindick, CPA
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