UPDATE: The fiscal cliff bill renewed the 100% exclusion (subject to the generous cap) under Section 1202 for investments made from September 27, 2010 through the end of calendar year 2013. See here: http://www.startuplawblog.com/2013/01/01/fiscal-cliff-bill-would-renew-100-exlusion-for-qsb-stock-investments/
By Dan Wright
Noncorporate investors who sold or plan to sell QSBS in 2011 and are expecting a large tax windfall under Section 1202 of the I.R.C. (“Section 1202”) will likely be disappointed. In general, the tax break under Section 1202 for gain realized by a noncorporate investor on the sale or exchange of QSBS in 2011, which is held by such investor as a capital asset and for a period of over 5 years, is about 1%. So why are people making such a big deal about Section 1202 as this year comes to a close?
