BarbriSFCourseDetails
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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Friday, June 20, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will offer tax advisers and professionals a practical guide to the rules governing IRC Section 1202 qualified small business stock (QSBS) owned by pass-through entities. The webinar will detail the gain exclusion rules of Section 1202 and the types of business entities that qualify as QSBS companies, and discuss planning opportunities for investors to structure pass-through entities to hold QSBS stock. The panel will also offer guidance on the reporting requirements and partnership allocation rules involving QSBS stock.

Faculty

Joseph C. Mandarino
Partner
Smith Gambrell Russell

Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of businesses and transactions, including experience with compliance, planning and M&A activities for partnerships, individuals and corporations. Mr. Mandarino’s practice also includes representation in tax controversy work. He writes and speaks extensively on a wide range of business, tax and finance topics.

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Matthew E. Rappaport
Vice Managing Partner
Falcon Rappaport & Berkman LLP

Mr. Rappaport chairs FRB’s Taxation and Private Client Groups. He concentrates his practice in Taxation as it relates to Real Estate, Closely Held Businesses, Private Equity Funds, Family Offices and Trusts & Estates. He advises clients regarding tax planning, structuring, and compliance for commercial real estate projects, all stages of the business life cycle, generational wealth transfer, family business succession, and executive compensation. Mr. Rappaport also collaborates with other attorneys, accountants, financial advisors, bankers, and insurance professionals when they encounter matters requiring a threshold level of tax law expertise. He is known for his work on complex deals involving advanced tax considerations, such as Section 1031 Exchanges, the Qualified Opportunity Zone Program, Freeze Partnerships, Private Equity Mergers & Acquisitions, and Qualified Small Business Stock. Mr. Rappaport has served as a trusted advisor for prominent real estate funds, executives of multinational corporations, venture capitalists, successful startup businesses, ultra-high net worth families, and clients seeking creative solutions to seemingly intractable problems requiring tax-focused analysis. 

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Bryan D. Keith
Managing Director
Andersen, LLC

Mr. Keith has more than 16 years of experience advising clients on corporate income tax issues, including acquisitions, dispositions, financings and corporate restructurings. He has experience in the preservation of tax net operating losses, S corporation matters and the treatment of transaction costs. Mr. Keith has written numerous articles in major tax publications on corporate tax issues. 

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Description

Section 1202 allows a taxpayer to exclude the gain from the sale of QSBS after a specified holding period. QSBS stock is any stock in a qualifying small business that was operating as a C corporation at the time of issue and throughout the holding period. While a pass-through entity is excluded from issuing QSBS shares, many investors may find advantages to holding QSBS in a private equity fund or other partnership, or an S corporation.

The rules allow gain exclusion so long as the purchaser acquired the stock at original issue. Partnerships and certain other pass-through entities may qualify for gain exclusion so long as the PTE meets the QSBS rules for acquiring the shares and continuously holds the stock for the holding period. A partner or member may only exclude gain up to the interest held in the partnership at the time of stock acquisition.

The original issue requirement provides significant restrictions on the transfer of QSBS; however, there are structuring tools, such as gratuitous transfers to grantor trusts or other disregarded entities, that provide some flexibility in achieving gain deferral. Pass-through entities may also exchange certain appreciated LLC assets for QSBS stock, provided the business operates according to 1202 requirements and meets the holding period.

Listen as our expert panel details the potential benefits and risks of a pass-through entity holding Section 1202 QSBS stock.

Outline

I. Tax treatment of QSBS under Section 1202

II. Meeting the requirements for gain exclusion

III. QSBS rollovers under Section 1045

IV. Pass-through entities acquiring QSBS at original issue

V. Rules specific to pass-through entities holding Section 1202 stock

VI. Transfers of QSBS shares allowable to maintain Section 1202 tax deferral benefits

Benefits

The panel will discuss these and other relevant topics:

  • What types of entities qualify--and do not qualify--for preferential treatment under Section 1202?
  • What are the mechanics of the gain exclusion calculations upon the sale of Section 1202 stock?
  • What are the rules and qualifications for the rollover deferral provisions under Section 1045?
  • What are the requirements to achieve ordinary loss treatment on the disposition of QSBS under Section 1244?
  • How can a pass-through entity benefit by holding QSBS stock?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • List the rules for gain exclusion on the sale of Section 1202 QSBS
  • Recognize what transfers are allowable while still maintaining Section 1202 deferral treatment on sale
  • Discern the rules applicable to the allocation of QSBS proceeds to partners or members in pass-through entities holding Section 1202 stock
  • Identify which taxpayers may hold QSBS shares and qualify for gain deferral


  • Field of Study: Taxes
  • Level of Knowledge: Basic
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.


Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).