Section 1202 of the Internal Revenue Code, focusing on Qualified Small Business Companies (QSBs) and their Qualified Small Business Stock, holds the key to potential tax savings of up to $10 million in tax-free capital gains when structured correctly. While not every company qualifies, it’s crucial to consider this provision when buying or selling a business, as it can be a game-changer!

Today, let us unlock the immense potential it holds for prudent business owners seeking to navigate the complex realm of taxation and investment!

[01:16] Maximizing Tax Benefits: Exploring the Potential of Section 1202 for Small Business Owners

[03:56] Eligibility and Limitations: Understanding the Parameters of Section 1202

[08:05] Evolution of Exclusions: The Historical Development of Section 1202

[09:54] Direct Acquisition and Compensation: Requirements for Tax-Free Capital Gains

[12:21] Unlocking Growth Potential: Harnessing Section 1202 for Angel Investors and Employee Incentives

[14:32] Maximizing Tax-Free Gains: Limits and Strategies under Section 1202

[16:50] Navigating Taxable Income: Considerations and Strategies for Share-Based Compensation

[19:13] Tax-Free Growth: Exploring Opportunities for Equity Investments and Future Exits

Resources:

Understanding the QSBS Tax Exemption: northerntrust.com/united-states/institute/articles/understanding-the-qsbs-tax-exemption

A Lavish Tax Dodge for the Ultrawealthy is Easily Multiplied: nytimes.com/2021/12/28/business/tax-break-qualified-small-business-stock.html

Qualified Small Business Stock (QSBS) Definition and Tax Benefits: investopedia.com/terms/q/qsbs-qualified-small-business-stock.asp

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Grant Bledsoe Financial Planner to Business Owners

I'm a financial planner to business owners, and the founder of Three Oaks Wealth. Our firm helps business owners align their business interests with their personal finances, often including the exit or sale of equity holdings.

I hold several professional credentials, including the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst, and Certified Exit Planning Advisor designations.