Today, many business owners are aware of qualified small business stock (“QSBS”) and the exclusion from gain on certain sales of QSBS under §1202, but it is still common to encounter business owners who are either unaware of...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
Congress enacted the Employee Retention Credit (“ERC”) during the COVID-19 pandemic to help employers retain their workforce and stay current on payroll despite economic difficulties that plagued the world. The legislation...more
Hedge funds and private equity groups have long used the “limited partner exception” to minimize self-employment taxes, but on March 13, 2018, the IRS announced that it was going to increase its scrutiny on taxpayers...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 recent years, the utilization of Section 1202 has grown considerably. Many businesses are formed as corporations at conception, private equity investors calculate the tax benefits from Section 1202 into their ROI...more
Tax planning is often a vital consideration in an exit strategy for business owners. While most business advisors factor in federal income tax consequences when analyzing transaction structures, state income tax consequences...more
Section 1202 of the Internal Revenue Code provides savvy business founders and investors an opportunity for large tax savings. In fact, if the entity and the business exit are structured correctly, upon an exit, the founders...more