Exemption Qualified Small Business Stock

General information: Qualified Small Business Stock (QSBS) refers to a tax benefit in the United States under Section 1202 of the Internal Revenue Code (IRC), which provides for potential tax exclusions on gains realized from the sale of stock in a Qualified Small Business. A Qualified Small Business (QSB) is a domestic C-corporation that meets the following criteria: it has gross assets of $50 million or less at the time of stock issuance and is actively engaged in a qualified trade or business (excluding fields like law, accounting, finance, and some others). The business must use at least 80% of its assets in the active conduct of its business.

Qualification’s requirement: Type of Company: The stock must be in a C corporation. Date of Issuance: It must have been originally issued after August 10, 1993. Company Size: The corporation’s total gross assets must have been $50 million or less at all times after August 9, 1993, and before and immediately after the stock was issued.