Description

This program reviews and analyzes the important changes made by the One Big Beautiful Bill Act (OBBBA) to qualified small business stock (QSBS) covered under Section 1202. Effective for stock issued after July 4, 2025, there are important changes that make Section 1202 much more appealing to clients willing to run the risks associated with doing business as a C corporation. These enhanced provisions could potentially lead to exclusion of capital gains if very strict compliance rules are followed. Section 1202 application is particularly attractive for start-ups and entrepreneurial endeavors. For taxpayers willing to confront the technical challenges of this provision, Section 1202 may produce impressive tax advantages.

Instructor: Mike Tucker, Ph.D., LL.M., J.D., CPA

Target Audience

Accounting and finance professionals needing to understand the changes brought about to QSBS by OBBBA and particularly those professionals with clients owning Section 1202 stock or who are considering acquiring Section 1202 stock

Course Objectives

Be well informed about OBBBA’s enhancements to QSBS

Subjects

The graduated holding periods and the related graduated capital gain exclusions

Raising the per-issuer gain exclusion cap to $15 million

Raising the corporate-level aggregate gross asset threshold to $75 million

Qualifications for a corporation to issue Section 1202 stock

Using multiple non-grantor trusts to unlock the $15 million exclusion cap

The 10% test associated with non-operating real estate and investment securities

The 50% working capital test

The 80% test relative to an active qualified trade or business

QSBS attestation letter

Excluded businesses

Permissible businesses, including manufacturing, retailing, technology, and wholesaling

How Section 1202 applies in the context of a transfer to other taxpayers