June 2021
Investors who are searching for new opportunities in healthcare and other sectors are noting the generous tax treatment available to them by holding qualified small business stock (QSBS). According to IRC Section 1202, QSBS holders may have gains of 50 percent to 100 percent excluded from their tax obligations, depending on the date the stock was acquired. The exclusion is generally limited to the greater of $10 million or 10 times the taxpayer’s basis in the stock. Proper planning may enable many entrepreneurs to fully avoid paying federal tax on qualified gains.
