IRS IRC §1202 (SALE OF A QUALIFIED BUSINESS UNDER QSBS)

3 Articles that Overview which you can Download

  • True or False? Each business owner does not pay any tax on their first $10 million of sales proceeds in a business sale? True if you use §1202 it does not matter if it is an asset or a stock sale.​
  • True or False? Investors and business buyers do not pay any capital gains taxes until their return in a sale or investment exceeds 1,000% (10X) of their original investment? Also True using §1202.
  • In order for a Buyer or Investor to acquire §1202 status the original sale had to be a stock sale & 5 years must pass from the date of that stock purchase to become QSBS  §1202 eligible.
  • Example, A private equity firm bought / invested in a company for $20 million, and over the next 6 years the value of their shares increase in that company to $220 million. Using  §1202 they would pay NO taxes on a sale. Taxes would only begin to be calculated after the first $220 million of sales proceeds.

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Below are 3 articles to familiarize your self with the IRS’s IRC 1202. 

3RD PARTY PROOF RE: IRS'S IRC 1202 (BUSINESS SALE)

ABA® (American Bar Association) website article

IRC-section-1202

Section 1202: A Big Deal for Small Business by By Matthew E. Rappaport, Falcon Rappaport & Berkman PLLC, New York, NY, and Caryn I. Friedman, Ernst & Young LLP, Washington, DC. Published Aug 3, 2018. See highlights on page 2.

Bloomberg Tax®

#3.) Detailed 12 page article for CPAs re QSBS and IRS IRC §1202 with 127  footnotes. Look at the first paragraph on page 1 to verify the benefits for both business owners and those that invest in a qualified business. 

1202 overview by ProfitsUSA CEO

Why IRC 1202 is good for America, Business owners and Investors. Easy article for business owners to understand  written by Howard Francis. If you do not qualify for IRC1202 let us know and we will assist you. 

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