Qualified small business stock
Definition
Under § 1202 of the Internal Revenue Code, stock of a domestic C corporation whose aggregate gross assets do not exceed $50,000,000 before or immediately after issuance. A taxpayer who acquires qualified small business stock at its original issue and holds it for more than five years may exclude 50 percent of any gain from a sale or exchange of that stock from his or her gross income.
Illustrative caselaw
See, e.g. Natkunanathan v. Comm'r of Internal Revenue, T.C.M. 2010-15 (T.C. 2010).
See also
Definition from Nolo’s Plain-English Law Dictionary
Certain small business corporation stock which receives a special tax break that is designed to help qualifying small C corporations raise capital. It does this by allowing qualifying investors in original issue stock to exclude 50% of their gains on the sale of the stock if a five-year holding period is met.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:22 pm
