• True or False? Each business owner does not pay any tax on their first $10 million of sales proceeds in a business sale? True if you use §1202 it does not matter if it is an asset or a stock sale.​
  • True or False? Investors and business buyers do not pay any capital gains taxes until their return in a sale or investment exceeds 1,000% (10X) of their original investment? Also True using §1202.

In order for a Buyer or Investor to acquire §1202 status the original sale had to be a stock sale & 5 years must pass from the date of that stock purchase to become QSBS eligible.

Example, A private equity firm bought / invested in a company for $20 million, and over the next 6 years the value of their shares increase in that company to $220 million. Using QSBS they would pay NO taxes on a sale. Taxes would only begin to be calculated after the first $220 million of sales proceeds.

#2.) Why IRC 1202 is good for America, Business owners and Investors. Easy article to read written by Howard Francis. 

#3.) Detailed article for CPAs re QSBS and IRS §1202 with 127 IRS IRC footnotes.

Most Silicon Valley Venture Capitalists use IRC 1202

#1.) From American Bar  Assn website. Click here to see on ABA website