January 19, 2011 
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Tax Notes from the Reid Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
New provisions in this act allow for great savings on the future sale of small business stock purchased or acquired in 2011. This is great news for Harlingen Businesses and allows great structuring opportunities.
Generally, non-corporate taxpayers may exclude 50 percent of the gain from the sale of certain small business stock acquired at original issue and held for more than five years. New rules on small business stock acquired before during 2011 allow for up to a 100% exclusion on capital gain at time of sale.
Here is a summary of the New Exclusions of capital gains on the sale of small business stock.
For stock acquired after February 17, 2009 and on or before September 27, 2010, the exclusion is increased to 75 percent.
For stock acquired after September 27, 2010 and before January 1, 2011, the exclusion is 100 percent and the AMT preference item attributable for the sale is eliminated.
Qualifying small business stock is from a C corporation whose gross assets do not exceed $50 million (including the proceeds received from the issuance of the stock) and who meets a specific active business requirement.
The amount of gain eligible for the exclusion is limited to the greater of ten times the taxpayer’s basis in the stock or $10 million of gain from stock in that corporation.
The provision extends the 100 percent exclusion of the gain from the sale of qualifying small business stock that is acquired before January 1, 2012 and held for more than five years.
Please contact us at 956-622-9742 for a free tax planning consulation on the new tax laws concerning business planning and business sale.
We are a Rio Grande Valley based CPA firm focused on Clients from Brownsville to Harlingen, McAllen, Mission, and Edinburg. We serve a variety of Clients to from small start ups, to larger businesses with $5 million to $50 million in revenue. Please call us today.
