Why Startup Founders Can Sell $10 Million in Stock and Owe Zero Federal Tax
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The post Why Startup Founders Can Sell $10 Million in Stock and Owe Zero Federal Tax appeared first on 24/7 Wall St..
A founder who sells $10 million of stock in a startup can owe no federal income tax on the gain, provided the shares meet the qualified small business stock (QSBS) rules in Section 1202. Under the statute, gross income “shall not include” the excluded share of gain from qualified small business stock (26 U.S.C. § 1202(a)(1)). The rule matters right now because private
A founder who sells $10 million of stock in a startup can owe no federal income tax on the gain, provided the shares meet the qualified small business stock (QSBS) rules in Section 1202. Under the statute, gross income “shall not include” the excluded share of gain from qualified small business stock (26 U.S.C. § 1202(a)(1)). The rule matters right now because private
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