ENG2614. Qualified Small Business Stock / Section 1202: A “Simple” Rule with Complex Realities (EST, TAX)

Many practitioners assume that Qualified Small Business Stock (QSBS) under Section 1202 is straightforward. In reality, it contains nuanced rules and common misunderstandings.

This session will walk through the key challenges involved in determining whether a corporation qualifies as a qualified small business and highlight the traps that can prevent shareholders from claiming the Section 1202 exclusion. The session will cover both the corporate-level and shareholder-level tests, some of which apply at a single point in time, while others must be satisfied on an ongoing basis.

Participants will also explore how various shareholder transactions can either preserve, enhance, or inadvertently eliminate eligibility for the QSBS exclusion.

Learning Objectives:

• Interpret the detailed requirements a corporation must meet to be considered a Qualified Small Business, including the factors that may jeopardize this status.
• Assess the shareholder-level considerations involved in acquiring, holding, and maintaining QSBS eligibility.