Section 1202 and Qualified Small Business Stock
Author: Jennifer Kowal
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Section 1202 encourages taxpayers to invest in small corporate businesses by excluding some or all of the gain on a taxable disposition of stock in a corporation that meets its requirements. In recent years and currently, Section 1202 allows an exclusion of up to 100 percent of the gain on a disposition of qualified small business stock.
This course covers potential traps for the unwary in the use of Section 1202, as well as opportunities to maximize its benefits. It will teach attendees about what QSBS is, how taxpayers can qualify for this incentive, key compliance requirements, and planning opportunities, including stacking.
Publication Date: October 2022
Designed For
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Topics Covered
- What QSBS is and how taxpayers can qualify for this incentive
- Key compliance requirements
- Planning opportunities, including stacking
- Potential traps for the unwary in the use of Section 1202
- Opportunities to maximize its benefits
Learning Objectives
- Recognize how to explain the definition of "qualified small business stock"
- Identify requirements to qualify for section 1202's exclusion and limitations on its use
- Recognize common planning opportunities for use of section 1202 exclusion
- Identify potential problems and impediments to obtaining the gain exclusion for QSBS
- Identify the IRC Section that provides an incentive for taxpayers to invest in certain small businesses
- Recognize the holding period date for purposes of meeting the five-year requirement under Section 1202
- Identify the percentage of the proceeds from the sale of the original QSBS that must be rolled over into the new QSBS issuer to effectively defer the taxation of gains
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
