Harik Thompson CPAs’ Post

If you're looking to sell your company, a C-Corporation structure has never been more enticing. Four reasons you should consider a C-Corp: 1. If you qualify for QSBS (qualifications posted in comments), you could sell your business 100% tax-free. 2. If you don't qualify for QSBS, you could avoid state income taxes. 3. C-Corps can issue different classes of stock to investors (its easier to raise capital). 4. Corporate income is taxed at lower effective rates than flow-through entities. Note: always talk to your tax advisor before making any changes in your entity structures. As always, there are pitfalls to avoid with any successful structure. Do you have any questions? Put them in the comments or send me a DM! #QSBS #taxplanning

Qualified Small Business Stock (QSBS) offers a tax break for non-corporate investors, allowing them to exclude capital gains if they hold the stock for over five years. To qualify, the company must be a U.S. C-corporation with assets under $50 million, using 80% of assets in active business. Redemptions can complicate eligibility, but careful planning can preserve this tax advantage, making QSBS a valuable tool for attracting investors and talent.

Qualified Small Business Stock (QSBS) offers a tax break for non-corporate investors, allowing them to exclude capital gains if they hold the stock for over five years. To qualify, the company must be a U.S. C-corporation with assets under $50 million, using 80% of assets in active business. Redemptions can complicate eligibility, but careful planning can preserve this tax advantage, making QSBS a valuable tool for attracting investors and talent.

When selling a business, one of the biggest mistakes owners make is failing to plan for the tax impact, especially if they own a C corporation. Mistake #2 from our list of the top five selling mistakes is overlooking the potential tax advantages of qualified small business stock (QSBS). If you qualify as a QSBS C corporation, the transaction can be tax-free for up to $10 million in gains per shareholder each year. For example, a $40 million transaction, split between two years for a husband and wife, could result in no taxes! But what if you're not a C corp? All is not lost! With proper planning, converting to a C corp could help you take advantage of these tax benefits. If you're currently structured as an S corp or LLC, restructuring may allow you to access these opportunities. However, it requires planning ahead—holding stock as a C corporation for five years is necessary to qualify. If you’re thinking about a sale in the next 5-7 years, now is the time to explore your options to avoid costly mistakes. Proper tax planning could make a world of difference! BGW CPA, PLLC #TaxPlanning #SellingABusiness #CCorporation #QSBS #anythingbuttypical

🚨 Ever thought about tax-free millions? QSBS might be the best-kept secret for investors! 🚨 Imagine selling your shares and keeping all the gains—without giving the IRS a cut. Qualified Small Business Stock (QSBS) offers an incredible, often overlooked opportunity to make this dream a reality. 🚀 Here’s the scoop: ✨ What’s QSBS? Qualified Small Business Stock is stock in eligible U.S.-based small businesses, and if you hold it for over 5 years, you could qualify for significant tax breaks. ✨ Tax-Free Gains: For those who meet the requirements, gains from selling QSBS stock can be 100% exempt from federal taxes. This exemption covers up to $10 million or 10 times the cost of the original investment—whichever is greater. ✨ Who Qualifies? This tax break is for investments in C-corporations with gross assets under $50 million at the time of issuance, benefiting investors who hold the stock for over five years. 💸 ✨ Why Does It Matter? For entrepreneurs, investors, and business owners, QSBS changes the game on investment and tax savings. Imagine rolling over tax-free gains into your next big venture! Ready to explore how QSBS could work for you? Reach out to our founder, Anshul Goyal, CPA in the United States, at anshul@kkca.io – let's take your tax strategy to the next level! 📈 #TaxFreeGains #QSBS #SmallBusinessInvesting #TaxSavingsTips #CapitalGains #USInvestors #TaxPlanning #IRSCompliance #FinanceStrategy #AnshulGoyalCPA

Qualified Small Business Stock (QSBS) is an often-overlooked tax incentive provided by the United States Internal Revenue Code (Section 1202) to encourage investment in small businesses. QSBS offers significant tax advantages to both investors and business owners who meet the eligibility criteria. For business owners, understanding and utilizing QSBS can be a valuable strategy for business planning and wealth optimization. https://lnkd.in/dK-dpwQv

Thanks again to Tom Dickson having me back next week with Financial Experts Network to talk about all things Qualified Small Business Stock (QSBS) / Section 1202! It is a tax code section that is both fascinating - to us nerds - and powerful in the right situations. It has also come under the spotlight and been more relevant circa 2010 on. Join me on 7/25 @ 1PM EST to talk through why that is the case and most importantly how it can help you as business owner, investor, or advisor helping clients. Some other things we will cover: ✅ The historical context and purpose behind Section 1202’s enactment from the 1990s and why it has become more relevant today. ✅ The magnitude of the potential tax exclusion upon the sale of QSBS. ✅ The corporate and investor requirements that must be met per Section 1202 for sales of QSBS to qualify. ✅ Common investor issues/questions that arise with Section 1202, including holding periods, company acquisitions and reorganizations, and stock redemptions. ✅ Tax planning opportunities to maximize QSBS tax exclusion including “stacking” and “packing”. Registration link in the comments:

Qualified Small Business Stock under section 1202 of the tax code or QSBS is a tool for estate planning available for founders and stock-compensated executives. The QSBS exclusion provision can enable proceeds from company exits to avoid capital gains taxes up to the greater of $10 million or 10 times the adjusted basis of the stock. For insights into how planning can allow QSBS investors to maximize after-tax returns, take a look at this report or set time to connect with me directly. https://lnkd.in/eWP3hSZb

Yes, to qualify for the Qualified Small Business Stock (QSBS) exemption under Section 1202 of the Internal Revenue Code, your investment must be in a domestic C Corporation. The corporation must be organized in the United States and meet other QSBS requirements.   Following up on a previous post on QSBS this is an overlooked requirement.