Late last evening, the House of Representatives passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853, the “Act”) one day after the Senate passed it. President Obama is expected to sign the Act into law soon. The Act has extended the 100% income exclusion available to non-corporate taxpayers for gain from sale of “qualified small business stock” (“QSBS”).
As we highlighted in an earlier client alert, the Small Business Jobs Act of 2010 (“SBJA”) increased the exclusion from taxable income for gain from sale of QSBS to 100%2 for QSBS held for at least five years. In addition, the SBJA provided that none of such gain is subject to the alternative minimum tax (“AMT”) which previously had been a significant impediment to the QSBS incentive. As we pointed out, under the SBJA, both of these changes applied only to QSBS acquired after the date of enactment of the SBJA (September 27, 2010) and before the end of 2010.
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