How will the New QSBS Changes Impact my Business?
Small business owners have a lot to gain from the new Qualified Small Business Stock QSBS changes. The new rules provide 100% exclusion from capital gains taxes on the sale of QSBS, as opposed to the 50% exclusion currently available. This change is effective for sales after September 27, 2017. This could mean big savings for business owners looking to sell their businesses.
The new QSBS rules are also more generous in terms of what kind of businesses qualify. under the old rules, only C corporations qualified for the 50% exclusion. Now, S corporations and partnerships can also take advantage of the 100% exclusion. This will make it easier for small businesses to take advantage of this tax break.
This more advantageous tax situation could have a big impact on businesses, particularly when it comes to selling shares or assets. If you’re thinking of selling your business or some of its assets, it’s worth considering how the new QSBS changes could affect you.
Of course, every business is different and there are many factors to consider before making any decisions. However, the new QSBS rules could provide a more favorable tax outcome for small business owners. It’s important to speak with a qualified tax advisor to learn more about how these changes could impact your specific situation.
The 100% exclusion from capital gains taxes on the sale of QSBS works by exempting all capital gains from the sale of QSBS from taxation. This means that business owners who sell QSBS after September 27, 2017 will not have to pay any taxes on the profits from the sale.
There are a few catches to be aware of with this change. First, the QSB stock must have been held for at least five years in order to be eligible for the 100% exclusion. Second, the business owner must have owned at least 50% of the company at the time of sale. Finally, the total amount of QSBS sold in a given year cannot exceed $10 million.
Despite these catches, the new QSBS changes are still a major benefit for business owners. The increased exclusion from taxation will allow business owners to keep more of their profits and reinvest them back into their businesses. This will ultimately lead to more growth and success for small businesses across the country.
If you’re planning on selling QSBS in the near future, it’s important to consult with a tax professional to ensure that you maximize your exclusion and minimize your tax liability. With proper planning, the new QSBS changes can be a major boon for your business.
Small business owners rejoice! The new Qualified Small Business Stock (QSBS) changes offer a more advantageous tax situation, with 100% exclusion from capital gains taxes on the sale of QSBS. This change is effective for sales after September 27, 2017. If you’re a small business owner, it’s important to understand how these changes will impact your business specifically. Be sure to speak with your accountant or financial advisor if you have any questions or concerns.