weekly ThinkAdvisor column of William Byrnes & Robert Bloink
Last summer's One Big Beautiful Bill Act modified the federal tax exclusion for qualified small-business stock, making the exclusion significantly more valuable.
When holding period requirements are satisfied, taxpayers are permitted to exclude some, or all, of the capital gain on the sale of such stock. The value of the exclusion is clear: Section 1202 of the Internal Revenue Code allows clients with significant holdings in startups to potentially avoid paying capital gains taxes on multimillion-dollar stock sales.
In this week’s column, we analyze what you need to know about this tax incentivized investment opportunity, including the risks.
Some issues we cover:
- The risks associated with investing in startup companies.
- At least seven states and the District of Columbia do not recognize the QSBS exclusion.
- New York proposed, and subsequently withdrew, a similar proposal.
Read our weekly column: https://www.thinkadvisor.com/2026/08/06/watch-this-trend-around-qualified-small-business-stock/
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