Description
Section 1202 allows qualifying taxpayers to exclude capital gains on the sale of QSBS. This Section offers substantial tax savings for eligible stockholders, and OBBBA has significantly expanded its eligibility requirements.
Prior to OBBBA, a five-year holding period was required to exclude capital gains for QSBS. OBBBA, however, offers a tiered exclusion, 50% after three years, 75% after four years, and a full exclusion after meeting a five-year holding requirement. Additionally, the aggregate gross assets threshold for qualified corporations has been raised from $50 million to $75 million, significantly increasing the number of eligible corporations.
The amount of gain excluded per tax return was also increased. Before OBBBA, the maximum exclusion was the greater of $10 million ($5 million if MFS) or 10 times the tax basis in the QSBS. Now, the limit is the greater of $15 million ($7.5 million if MFS) or 10 times the tax basis in the QSBS. These modifications significantly expand the opportunity for stockholders to benefit from the QSBS exclusion.
The eligibility requirements are complex. Advisers must ensure that corporations meet the requirements of Section 1202, including the applicable effective dates.
Listen as our panel of corporate tax advisers reviews the recent changes to QSBS under Section 1202.
Presented By
Mr. Dobens is a Senior Manager in Ernst & Young’s National Tax Department where he primarily focuses on the taxation of partnerships and limited liability companies. He also spends significant time advising venture capital funds and their investors as to qualified small business stock investments. Mr. Dobens received a B.S. in Accounting from Plymouth State University, and both an M.S. in Taxation and J.D. from Northeastern University.
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.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
Date + Time
- event
Monday, October 20, 2025
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Section 1202 Qualified Small Business Stock: introduction
II. Section 1202 before OBBBA
III. OBBBA's modifications to Section 1202
IV. Eligible corporations
V. Eligible stockholders
VI. Other requirements
VII. Planning opportunities
The panel will discuss these and other critical issues:
- Modifications to Section 1202 under the OBBBA
- Identifying corporations and shareholders that meet Section 1202 eligibility requirements
- Planning opportunities under 2025 tax legislation
- Avoiding QSBS missteps
Learning Objectives
After completing this course, you will be able to:
- Identify corporations meeting Section 1202 requirements
- Determine stockholders who might be eligible for the Section 1202 exclusion
- Decide what missteps should be avoided with QSBS
- Ascertain Section 1202 planning opportunities after OBBBA's expansion of eligibility rules
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- 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.
BARBRI 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.
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