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The One Big Beautiful Bill Act (OBBB) has spurred even more interest among businesses that may qualify for the tax benefits associated with qualified small business stock (QSBS), including businesses that currently are...more
C Corp - Imagine a closely held and growing start-up business (“Corp”) that was recently incorporated under state law and, so, is treated as a regular C corporation for purposes of the federal income tax. Thus, Corp will pay...more
Stock qualifying under Section 1202 of the Internal Revenue Code of 1986, as amended (the “Code”), as Qualified Small Business Stock (“QSBS”) allows eligible non-corporate taxpayers to potentially exclude a portion or all of...more
Benefits Offer Enhanced Tax Exclusions and Eligibility for Founders, Early Employees, and Investors- The recently enacted One Big Beautiful Bill Act makes several taxpayer-friendly revisions to the rules governing Qualified...more
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. The legislation permanently extends some of the changes to the tax code first introduced in 2018 while adding additional provisions designed to...more
The One Big Beautiful Bill Act (OBBBA) made the following changes to qualified small business stock (QSBS): The holding period is now graduated for stock acquired after July 4, 2025....more
Given the recent amendments to Internal Revenue Code Section 1202,1 which increase the benefits of holding qualified small business stock (QSBS), many companies currently operating as tax partnerships may want to convert into...more
In this fifth installment of my multi-part series on the One Big Beautiful Bill Act, Steve Nofziger and I discuss a provision of the Act that impacts certain business owners who are contemplating a sale of their shares, Code...more
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA extends and expands numerous tax provisions from the Tax Cuts and Jobs Act of 2017 (TCJA), repeals or scales back several provisions from...more
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, which had narrowly passed through the United States Congress. The OBBBA makes permanent certain tax provisions that were due to expire...more
On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” into law. Among notable tax legislation, the act expanded the qualified small business stock exclusion, potentially making C Corporation tax status a...more
On June 16, 2025, the Senate Finance Committee released its draft legislative text (the Senate Proposal) following the prior passage of the One Big Beautiful Bill Act by the House of Representatives (the House Bill). ...more
The tax benefits conveyed by Section 1202 of the Internal Revenue Code to owners of qualified small business stock (QSBS) have been available to small business owners in some form since Section 1202 was first enacted in 1993....more
Issuing qualified small business stock (“QSBS”) is a valuable tool that can provide significant tax savings to searchers and independent sponsors alike upon the eventual sale of one or more of their portfolio companies....more
Since the finalization of the IRS’s “check-the-box” entity-classification regulations nearly 30 years ago, a state law LLC can elect to be taxed an association taxable as a corporation. During the past month, we have heard...more
Many non-US startup founders initially incorporate in their home country and then decide to reincorporate or create a subsidiary in the US. There are many advantages for foreign founders to move operations to the US,...more
Search Funds should consider the availability of the tax benefits of Section 1202 in connection with their acquisitions. The upside, if properly structured, can be significant. Section 1202 has gained popularity likely due to...more
If you own a small business, you may qualify for significant tax savings under section 1202 of the Internal Revenue Code of 1986, as amended (Section 1202). Owners or investors of certain C corporations (C corps) may be...more
Corporate Partner, Eric Perlmutter-Gumbiner, shared his expertise on latest developments and trends in the business of beauty, fashion, and consumer goods with Los Angeles Times in their Beauty, Fashion & Consumer Goods...more
For an active business in the post-Tax Cuts and Jobs Act (TCJA) world of lower corporate tax rates, buyers and shareholders considering a future exit should always consider C corporations and the availability of potential...more
In Leto v. United States, the taxpayer reincorporated an S corporation business into a C corporation, then the taxpayer later sold the shares in the C corporation and tried to exclude the gain from such sale under section...more
Qualified Small Business Stock (“QSBS”) is arguably one of the largest “gifts” Congress has given taxpayers by excluding from a shareholder’s gross income the greater of $10 million or 10 times the shareholder’s basis in the...more
Section 1202 provides a significant incentive for taxpayers to invest in small businesses structured as C corporations by allowing them to exclude large amounts of gain on a future sale of stock in those businesses. ...more
In the event of an M&A transaction, many stockholders plan to take advantage of the exclusion from federal taxable income of gain realized from the sale or exchange of “qualified small business stock” (QSB stock). Section...more
On June 9, 2023, US House Ways and Means Committee Chairman Jason Smith introduced the American Families and Jobs Act, which would have major implications for several provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) and...more