By Kenneth H. Bridges, CPA, PFS December 2013
Investments made in “Qualified Small Business Stock” (QSBS) after September 27, 2010 and before January 1, 2014 and held for more than 5 years can qualify for a gain exclusion of up to 100%, with no addback for alternative minimum tax purposes. To be eligible as QSBS, the stock must be of a domestic C-corp with total assets of $50 million or less and at least 80% of the corporation’s assets must be used in the active conduct of a qualified business. Effective for investments made on or after January 1, 2014, the exclusion drops to 50% and any amount excluded will be an addback in computing alternative minimum tax.
Kenneth H. Bridges, CPA, PFS is a partner with Bridges & Dunn-Rankin, LLP an Atlanta-based CPA firm.
This article is presented for educational and informational purposes only, and is not intended to constitute legal, tax or accounting advice. The article provides only a very general summary of complex rules. For advice on how these rules may apply to your specific situation, contact a professional tax advisor.