Qualified Small Business Stock

News & Analysis as of

Tax Law Extension Good News for Non-corporate Investors

Congress once again temporarily extends the 100 percent capital gains exclusion on “qualified small business stock.” On December 19, 2014, President Obama signed the Tax Increase Prevention Act of 2014 (the 2014 TIPA)...more

California Tax Developments - A Reed Smith Quarterly Update (3rd Quarter 2014)

Case Updates - Court finds ownership of LLC membership interest does not constitute doing business in California On November 14, the Fresno County Superior Court determined that Swart, an Iowa-based corporation with a...more

Private Ruling Endorses Taxpayer-Friendly Reading of “Qualified Small Business” Under Section 1202

On September 5, 2014, the Internal Revenue Service (“IRS”) released Private Letter Ruling 201436001 (the “Ruling”), which found that a company providing products and services primarily within the pharmaceutical industry was a...more

100 Percent Tax Exemption for Gain on Certain Qualified Small Business Stock Expiring at Year End

In January 2013, Congress enacted legislation that could provide certain investors who acquire qualified small business stock (“QSBS”) before the end of 2013 with a significant tax benefit. In effect, the gains realized from...more

Tax planning for year-end; expiration of the 100% tax exemption for gain on QSBS

Just a reminder that the temporary 100% exclusion for Federal capital gains tax on the sale of “qualified small business stock” (“QSBS”), under Section 1202 of the IRS regulations, is set to expire at the end of calendar year...more

Governor Signs Bill Providing Retroactive Tax Relief to Sellers of Qualified Small Business Stock

On October 4, 2013, Governor Brown signed into law California Assembly Bill 1412 (Stats. 2013, ch. 546) ("AB 1412"), which provides tax relief to those individual taxpayers affected by the decision in Cutler v. Franchise Tax...more

Tips for Productive 2013 Year-End Tax Planning

Year-end tax planning could be especially productive this year because timely action could nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them, which, at the present time, looks...more

California Tax Relief for Sellers of Qualified Small Business Stock

On Friday October 3, 2013, Governor Brown signed into law AB 1412, which provides full relief for individuals affected by the decision in Cutler v. Franchise Tax Board, where the California Court of Appeal held that the...more

Corporate & Securities Law Alert July 2013 - Startups: Extended Window of Opportunity Available By Way of Section 1202

Investors and owners of startups are always looking to maximize the potential value of a business and realize that value at some point in the future. Taxation is an important driver of the value of a business. While taxation...more

Tax Law Updates - June 2013

If you would like copies of an article that is not linked to a PDF file, or if you would like to receive copies of future articles, please contact Rebecca Sprunger at rsprunger@orrick.com. - 03-29-2013 (U.S.) Final...more

For Private Equity Investors, Section 1202 May Be Worth Another Look

Included in the American Taxpayer Relief Act of 2012 (ATRA) are provisions that extended some of the more significant benefits of Internal Revenue Code Section 1202, the Code provision that permits eligible noncorporate...more

FTB Announces Temporary Reprieve on Retroactive Assessment of Qualified Small Business Stock Taxes

On January 8, 2013, we published a newsletter (a copy of which can be found here) detailing the Franchise Tax Board's ("FTB") questionable legal and policy decision to begin collecting on a retroactive basis approximately...more

The State Of California Seeks Back Taxes From Small-Business Shareholder- Not So Fast

A closer look at federal constitutional case law would seem to indicate that the State of California may not find it so easy to seek refunds plus interest after all....more

Corporate Law Report: Workplace Romances, FMLA Changes, California Tax News, and More [Video]

Our latest Corporate Law Report includes a look at how to deal with office relationships, changes to FMLA rules to benefit veterans, an unfortunate tax development for investors in certain California business, and other...more

California’s Attempt to Retroactively Tax its Residents

In Cutler v. Franchise Tax Board, a case litigated by Reed Smith, a California Court of Appeal held that the California property and payroll requirements of California’s Qualified Small Business Stock provisions were invalid....more

Excluding 100% of Gain From the Sale of Qualified Small Business Stock Acquired in 2013

If you own a small business, it may be easier to raise money in 2013. This is because, among the favorable tax breaks included under the American Taxpayer Relief Act (the “2012 Act”), there is a temporary extension of the...more

Tax Alert: FTB Disallows California Qualified Small Business Stock Benefits

The California Franchise Tax Board (FTB) recently issued FTB Notice 2012-03, stating that the FTB will disallow the exclusion or deferral of gain under California's qualified small business stock (QSBS) statute for all tax...more

Exclusion from Tax for Stock Issued by Qualified Small Business Corporations

On November 3, 2010 and January 18, 2011, we issued client alerts discussing the opportunities provided by the Section 1202 exclusion from tax on gain realized on the sale of certain stock issued by a “qualified small...more

Congress Extends 100% Exclusion For Gains From Sales Of Qualified Small Business Stock

As a pleasant surprise to many investors, the recently enacted American Taxpayer Relief Act of 2012 (the “Act”) extends the 100% exclusion for gains from sales of Qualified Small Business Stock (“QSB Stock”) to QSB Stock...more

High Net Worth Family Tax Report, Vol. 8, No. 1 - January 2013

Table of Contents: Remember to file your gift tax return and other follow-up related to 2012 gifts; Review estate plans in light of $5 million exemption becoming permanent; Annual exclusion amount for gifts increased for...more

Fiscal Cliff Legislation Extends Tax Incentive to Invest in Small Businesses

As a result of the recent “fiscal cliff” legislation, otherwise known as the American Taxpayer Relief Act of 2012 (2012 Tax Act), many individual investors are expecting future tax increases, either in the form of higher...more

Recent Changes Allow Tax-Free Receipt of up to $10 Million in Gain from the Sale of Small Business Stock

One silver lining to the American Taxpayer Relief Act of 2012 (“ATRA”) is that it extended the 100% exclusion for capital gain on qualified small business stock (“QSBS”) acquired between 2010 and 2011 to include stock...more

Congress Extends the 100% Tax Exemption for Gain on Certain Qualified Small Business Stock, With Retroactive Effect, Through 2013

On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the “Act”). Among its provisions, the Act extends a tax benefit whereby capital gains from the sale or exchange of certain...more

Investment Window For Capital Gains Tax Exclusion For Certain New Investments In Small Businesses Extended To December 31, 2013

On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the Act). Among other provisions, the Act provides that the 100% exclusion from gross income of certain capital gains from sales...more

Congress Extends Exclusion for Investors in Qualified Small Businesses

Among the taxpayer-favorable aspects of the American Taxpayer Relief Act of 2012 (Act), the 100 percent exclusion from gross income of gain on the sale of Qualified Small Business Stock (QSBS), provided for in section 1202 of...more

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