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1202 - InternalRevenueCode (a)Exclusion(1)Ingeneral ,...

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Internal Revenue Code   § 1202 Partial exclusion for gain from certain small business stock. (a) Exclusion.   (1) In general.   In the case of a taxpayer other than a corporation, gross income shall not include 50  percent of any gain from the sale or exchange of qualified small business stock held  for more than 5 years.  (2) Empowerment zone businesses.   (A) In general. In the case of qualified small business stock acquired after  the date of the enactment of this  paragraph  in a corporation which is a  qualified business entity (as defined in  section 1397C(b)  ) during  substantially all of the taxpayer's holding period for such stock,  paragraph (1)   shall be applied by substituting “60 percent” for “50 percent”.  (B) Certain rules to apply. Rules similar to the rules of  paragraphs (5)  and  (7)   of section 1400B(b) shall apply for purposes of this  paragraph  (C) Gain after 2014 not qualified.  Subparagraph (A)  shall not apply to gain  attributable to periods after December 31, 2014.  (D) Treatment of DC Zone. The District of Columbia Enterprise Zone shall  not be treated as an empowerment zone for purposes of this  paragraph  (3) Special rules for 2009 and 2010.   In the case of qualified small business stock acquired after the date of the enactment  of this paragraph and before January 1, 2011.  (A)  paragraph (1)  shall be applied by substituting “75 percent” for “50  percent”, and  (B)  paragraph (2)  shall not apply.  (b) Per-issuer limitation on taxpayer's eligible gain.   (1) In general.   If the taxpayer has eligible gain for the taxable year from 1 or more dispositions of  stock issued by any corporation, the aggregate amount of such gain from dispositions 
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of stock issued by such corporation which may be taken into account under  subsection (a)  for the taxable year shall not exceed the greater of—  (A) $10,000,000 reduced by the aggregate amount of eligible gain taken into  account under  subsection (a)  for prior taxable years and attributable to  dispositions of stock issued by such corporation, or  (B) 10 times the aggregate adjusted bases of qualified small business stock  issued by such corporation and disposed of by the taxpayer during the  taxable year.  For purposes of  subparagraph (B)  , the adjusted basis of any stock shall be  determined without regard to any addition to basis after the date on which such stock  was originally issued.  (2) Eligible gain.   For purposes of  this subsection  , the term “eligible gain” means any gain from the  sale or exchange of qualified small business stock held for more than 5 years.  (3) Treatment of married individuals.
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