Qualified Small Business Stock: 100% Exclusion

You might be wondering about the status of the 100% tax exclusion for qualified small business stock acquired during certain periods and held for more than five years.

Late last year, the Congress extended the 100% tax exclusion for qualified small business stock acquired:

1) after the date of the enactment of the Creating Small Business Jobs Act of 2010 (the President signed this bill on September 27, 2010) and

2) before January 1, 2015.

In other words, the 100% exclusion doesn’t currently cover qualified small business stock acquired during 2015.

You can find the bill that Congress passed late last year at this Congress.gov link.

I wrote a blog post about last year’s Congressional action that you can find here.

The Congress has extended the 100% benefit a couple of times now, including retroactively. But it does not appear that Congress is going to do the same thing this year that it did last year. In other words, it does not appear that Congress is going to renew this December the 100% exclusion retroactively to cover qualified small business stock acquired in 2015.

The QSB benefit does not currently help people who acquired stock during 2015.

Deloitte wrote a good piece on this on January 30th of this year. As Deloitte states:

Through subsequent legislation, including the recently enacted TIPA of 2014, the exclusion has been extended for QSBS acquired through December 31, 2014.

There is still hope. Perhaps Congress will tackle this next year.

(Remember, the 100% exclusion has caps. It is not unlimited.)

This blog does not constitute legal or tax advice. In all instances you should visit your legal or tax advisor with regards to your personal tax situation.

 

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