• New Tax Law Allows Some to Avoid Paying Tax on the Sale of their Business
  • August 5, 2016 | Author: Warren P. Kean
  • Law Firm: Shumaker, Loop & Kendrick, LLP - Charlotte Office
  • At the end of last year, the President signed into law the ability of some investors to not pay tax on the sale of “qualified small business stock” (“QSBS”) acquired after September 27, 2010 and held for more than five years. Under the new law (which permanently extends this special treatment that had been allowed on a temporary, annual basis since 2010), the gain from such sales (subject to numerous technical qualifications and limitations) is excluded from taxable income and, therefore, is not subject to federal and, for most states, state income taxes, the alternative minimum tax, or the 3.8% tax (sometimes referred to as the Obamacare tax) on capital gains and other net investment income.