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$10 Million Tax-Free!

Do you want to pay $0 in taxes on a capital gain of up to $10 million?  Start a business!

Many people are already familiar with section 1202 stock.  Previously, section 1202 of the IRS code allowed certain individuals to exclude from gross income 50% of the capital gains they made on the sale of qualified small-business stock.  This exclusion has been in place since 1993,  but was raised to 75% for small business stock issued during 2009 and for most of 2010.  In September of 2010, Congress passed the Small Business Jobs Act.  The Jobs Act increased the capital gains exclusion to 100% (up to $10 million) until the end of 2010, and the Job Creation Act of 2011 extended this 100% exclusion amount until the end of 2011.  This means that for another month (at the time of this publishing), people who are contemplating starting a business could still take advantage of this opportunity.  Among the qualifications to be eligible for this 100% exclusion are the following:

1.  The small business must be a domestic C corporation (not an S corporation, partnership, or LLC).  

2.  The stock purchased must be purchased by the investor upon original issuance from the corporation (may be through an underwriter).

3.  The qualifying small-business stock must be acquired after September 27, 2010 and before January 1, 2012.

4.  The qualifying small-business stock must be held for at least 5 years.

5.  The small business must use 80% of its assets in a qualifying active business for substantially all of the investor's holding period.

6.  The exclusion applies only to noncorporate taxpayers (ie. individuals). 

 

Please call us if you have any questions regarding your personal situation.  Don't miss what could be a once-in-a-lifetime opportunity!

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560 South 100 West, Suite 12
Provo, UT 84601
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Telephone: 801.375.2969
Fax: 801.375.2954

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