About the Course
Introduction
This CLE/CPE program will provide business owners, investors, tax counsel and advisers a detailed analysis of available tax strategies for qualified small business stock (QSBS) to limit or minimize potential tax liability. The panel will discuss corporate and shareholder requirements and tax savings available for QSBS and offer structuring considerations to maximize QSBS benefits in a variety of situations.
Description
Section 1202 allows a fully or partially tax-free sale of QSBS by certain taxpayers, in certain circumstances. The capital gain exclusion can create a significant benefit for investors and startups. Tax counsel must understand the rules and available structures to allow for QSBS treatment and potentially unlock millions in cash tax savings.
To qualify, certain corporate qualifications, shareholder eligibility rules, and holding period requirements must be met. The business must have no more than $50 million (or $75 million after July 4, 2025) in aggregate gross assets at the time the stock is issued, the company must be engaged in a qualified trade or business, and investors must hold the stock for five years (or three years for shares issued after July 4, 2025). Shareholders not holding the stock for five years could preserve QSBS benefits by rolling over the sales proceeds under Section 1045.
Under OBBBA, permitted gain exclusion caps for purposes of QSBS have increased. Tax counsel must understand the nuances involved in obtaining QSBS treatment for certain taxpayers.
Listen as our panel discusses the requirements of Section 1202, pitfalls to avoid, and planning opportunities available so shareholders achieve maximum tax savings.
Presented By
Mr. Karachale advises individuals and businesses on a range of tax planning and tax controversy matters at the federal, state, local, and international levels. He also serves as outside general counsel to a variety of companies, providing general corporate and related business guidance. Mr. Karachale regularly works with entrepreneurs and start-up companies and is nationally recognized on qualified small business stock (QSBS) and related section 1202 issues. He has been quoted in the New York Times, Bloomberg, and Business Insider regarding QSBS.
Mr. Melton is a tax attorney in Holland & Knight's Dallas office and serves as the co-chair of the Tax, Executive Compensation and Benefits Practice Group. He focuses on federal income taxation issues related to domestic and international transactions of private equity and hedge funds, as well as other investment partnerships, joint ventures, real estate investment trusts (REITs) and operating businesses. More specifically, Mr. Melton assists clients with investment fund formation, mergers and acquisitions (M&A), real estate investment and development, and financial instruments and derivatives. He is experienced in a broad spectrum of tax issues such as complex partnership allocations, inbound and outbound cross-border investments, and investments by sovereign wealth funds, tax-exempt entities, international organizations and other institutional investors.
Mr. Pinegar focuses his practice on business and tax planning for private businesses, private equity funds, family offices, public companies, and high net worth individuals. He has significant expertise and experience advising clients on complex U.S. federal income tax structuring and planning issues for a wide range of business transactions, including domestic and international mergers, acquisitions, divestitures, roll-ups, joint ventures, tax-free reorganizations, spin-offs, tax-deferred rollovers, financings, restructurings and qualified small business stock (“QSBS”) planning. Mr. Pinegar is the creator and author of M&A Tax Tips, a LinkedIn newsletter where he provides weekly updates and insights on pertinent tax topics.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, January 12, 2027
- schedule
1:00 PM ET/10:00 AM PT
I. QSBS defined (Section 1202)
II. Impact of OBBBA statutory changes
III. Corporate requirements
IV. Shareholder requirements
V. Section 1045 rollover mechanics
VI. Pass-through entities: partnerships (including LLCs) and S corps
VII. Structuring considerations
The panel will review these and other key issues:
- How can an eligible investor maximize their QSBS exclusion?
- What stock is and is not eligible for the QSBS exclusion?
- What are the new and expanded QSBS benefits under Section 1202?
- What planning opportunities (and pitfalls) arise under the rules for founders, investors, and funds?
- How can you align exit timing, investment structuring, capitalization, and documentation practices to maximize QSBS advantages?
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