Very few things get an accountant excited, but this is one of them.
Congress previously passed a law that allowed a taxpayer that acquired original issued C Corporation stock of a qualified small business to excluded up to $10 million of gain on its disposition if the stock was held for at least 5 years. The original law was effective for stock acquired after Sep. 27, 2010 and before Jan. 1, 2012.Please see our previous blog posts for a more detailed discussion of the eligibility requirements.
The 2012 Taxpayer Relief Act retroactively extends this provision for two years so that taxpayers may exclude 100% of gain from the disposition of qualified small business stock acquired after Sep. 27, 2010 and before Jan. 1, 2014. The 2012 Taxpayer Relief Act also makes certain technical amendments relevant to qualified small business stock acquired during earlier periods. We’ll post later about these technical amendments.
We think the relevance of this law, will fit in well with our expectations with regards to mid-year “business tax reform”. This should be a serious consideration in 2013.
If you have any questions regarding small business stock or planning strategies for 2013 and beyond, please do not hesitate to contact us.