The Small Business Jobs Act has many incentives for the small business, such as the limited exclusion of capital gains from taxation, as long as the said business qualifies by being a “qualified small business,” “qualified trade or business,” and a “C” corporation. Here’s more information on the benefits you and your company may be able to receive from the act.
One of the most important qualifications for tax incentives under the Small Business Jobs Act is the length of the investment’s holding period. Stock usually needs to be held a minimum of five years by an investor to be eligible for the tax breaks. The investment also has to be for buying stock from the stock issuer directly or from an underwriter, as opposed to the purchase of stock that was previously owned by a shareholder for property, cash, or services.
Firms that specialize in venture capital as well as individual investors are just some of the businesses that can use these tax breaks developed for small business. Virtually all investors (who aren’t corporations) should be eligible for tax incentives if they invest in eligible businesses as stated in Section 1202 of the tax code. Gains that pass through partnerships, “S” corporations, LLCs or Limited Liability Companies, and common trusts may qualify for the tax breaks if they have held the investments in question for at least five years, or transfer stock to individuals from the LLC, “S” corporation, or partnership.
There are a number of notable exclusions to these tax incentives. If the stock issuer repurchases some stock before it is issued, he or she may cause disqualification from the tax exclusion on capital gains. Investors may also become ineligible if they hold the same stock in short sale, get the option to sell it at a fixed amount, or reduce investment-holding risk with a transaction.
These incentives and the projected rate increase on capital-gain taxes can push more investors (including seniors) into investing this year. If you’re a retiree or near-retiree with a small business, find out if you can benefit from the tax incentives provided by the Small Business Jobs Act of 2010 by talking to your tax planner.
This review was brought to you by Puritan Financial Group. Puritan Financial Group is owned by Puritan Financial Companies, based in Dallas TX. Puritan Financial Group is a leading provider of financial solutions for clients beginning in their peak earning years and continuing through retirement, helping them to accumulate, protect and transfer wealth.
One of the most important qualifications for tax incentives under the Small Business Jobs Act is the length of the investment’s holding period. Stock usually needs to be held a minimum of five years by an investor to be eligible for the tax breaks. The investment also has to be for buying stock from the stock issuer directly or from an underwriter, as opposed to the purchase of stock that was previously owned by a shareholder for property, cash, or services.
Firms that specialize in venture capital as well as individual investors are just some of the businesses that can use these tax breaks developed for small business. Virtually all investors (who aren’t corporations) should be eligible for tax incentives if they invest in eligible businesses as stated in Section 1202 of the tax code. Gains that pass through partnerships, “S” corporations, LLCs or Limited Liability Companies, and common trusts may qualify for the tax breaks if they have held the investments in question for at least five years, or transfer stock to individuals from the LLC, “S” corporation, or partnership.
There are a number of notable exclusions to these tax incentives. If the stock issuer repurchases some stock before it is issued, he or she may cause disqualification from the tax exclusion on capital gains. Investors may also become ineligible if they hold the same stock in short sale, get the option to sell it at a fixed amount, or reduce investment-holding risk with a transaction.
These incentives and the projected rate increase on capital-gain taxes can push more investors (including seniors) into investing this year. If you’re a retiree or near-retiree with a small business, find out if you can benefit from the tax incentives provided by the Small Business Jobs Act of 2010 by talking to your tax planner.
This review was brought to you by Puritan Financial Group. Puritan Financial Group is owned by Puritan Financial Companies, based in Dallas TX. Puritan Financial Group is a leading provider of financial solutions for clients beginning in their peak earning years and continuing through retirement, helping them to accumulate, protect and transfer wealth.
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