Qualified Small Business Stock: Navigating Section 1202 Tax Benefits and Strategies

Course Description

This course will review the general rules for QSBS benefit, including pre- and post-OBBBA changes to the law.  The course will provide updates on relevant topics, including QSBS stacking, 1045 rollovers to extend holding period, and LLC to C Corp conversions.

Principles

• Understand the Core Section 1202 QSBS Requirements
  • Identify the requirements for qualifying stock, eligible corporations, qualified trades or businesses, original issuance, holding periods, and other conditions necessary to obtain the Section 1202 exclusion.
• Apply the Pre- and Post-OBBBA Rules
  • Understand how the OBBBA changes affect QSBS eligibility, exclusion amounts, holding periods, and other key requirements, and distinguish the rules applicable to stock issued before and after the changes.
• Structure Transactions to Maximize QSBS Benefits
  • Evaluate transaction structures and planning opportunities—including QSBS stacking, ownership strategies, and other techniques—to maximize the available Section 1202 exclusion while maintaining compliance with the statutory requirements.
• Use Section 1045 and Entity Conversions Strategically
  • Understand how Section 1045 rollovers can preserve or extend QSBS planning opportunities and evaluate the tax considerations of converting an LLC or other entity into a C corporation.
• Integrate QSBS Planning Throughout the Investment Lifecycle
  • Identify QSBS considerations at formation, financing, ownership changes, and exit, with an emphasis on documenting eligibility, monitoring statutory requirements, and avoiding actions that could jeopardize the benefit.

Syllabus

1. General review of QSBS rules
2. Update on OBBBA changes to QSBS rules
3. Methods to maximize QSBS benefits