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Tax-Free Exit: Section 1202 Stock Exposed
Manage episode 489297517 series 3627037
What Is 1202 Stock?
Millions of dollars in potential tax savings are hiding in plain sight for many business owners. Section 1202 stock, also known as Qualified Small Business Stock (QSBS), represents one of the most powerful yet underutilized tax strategies available to entrepreneurs planning their exit.
Tax expert Phil Giguere breaks down this remarkable provision that allows eligible business owners to exclude up to 100% of capital gains when selling qualified small business stock. The numbers are staggering - on a $10 million business sale, QSBS status could save over $2 million in federal capital gains taxes alone, plus avoiding the additional 3.8% Net Investment Income Tax. When state tax benefits are factored in, the combined savings can approach or exceed $3.3 million.
Whether you're launching a new venture, considering converting an LLC to a C-Corporation, or mapping out your eventual exit strategy, this episode provides critical insights into potentially saving millions through proper tax planning.
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Chapters
1. Introduction to Knowing What Counts (00:00:00)
2. Introducing Section 1202 Stock (00:00:31)
3. Meet Phil Jaguer, Tax Planning Expert (00:00:54)
4. QSBS Definition and Key Benefits (00:01:39)
5. Why Section 1202 Has Gained Popularity (00:04:03)
6. Four Requirements to Qualify as QSBS (00:05:36)
7. State Tax Considerations for QSBS (00:07:54)
8. Converting Existing Businesses and Family Planning (00:09:22)
9. Episode Conclusion (00:10:46)
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