capital gain handout supplement IRC Section 1202

capital gain handout supplement IRC Section 1202 - Income...

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Unformatted text preview: Income Tax Accounting Fall 2011 Supplement (September 27, 2011) to Capital Gain Handout IRC § 1202 Partial exclusion on gain realized from the sale of certain small business stock IRC § 1202 reads as follows: “In the case of a taxpayer other than a corporation, gross income shall not include 50 percent of the gain from the sale or exchange of qualified small business stock held for more than five years. Under this provision individuals are able to exclude the greater of (1) $10 million or (2) 10 times the taxpayer’s basis in the qualified small business stock. While the exclusion is generally equal to 50% of the gain on the sale of qualified business stock held for more than five years this exclusion is 100% for qualified small business stock acquired after September 27, 2010 and before January 1, 2012. IRC § 1202(c) defines qualified small business stock as any stock in a “C” corporation which is originally issued after the date of the enactment of the Revenue Reconciliation Act of 1993 provided that this...
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