QSBS offers remarkable tax breaks – But be sure to follow strict rules

Description

Abstract: An often-overlooked provision of the U.S. tax code — Section 1202 — offers investors a remarkable tax break: the ability to exclude up to 100% of the gain on the sale of qualified small business stock (QSBS). But as this article explains, the stock must meet certain requirements and investors should weigh the benefits against the potential tax costs and investment risks. A sidebar warns that QSBS can be disqualified if it’s redeemed within two years of issuance.