Friday, December 17, 2010
Today, President Obama signed the “Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010” (the “Act”). Among other features, the Act extends for an additional year the 100% exclusion from federal capital gains tax for sales of qualified small business stock (QSBS) purchased during 2011. As I wrote in my earlier post from November 15, 2010, this benefit previously applied only with respect of stock purchased through the end of 2010. This extension provides a continued incentive for investment in small businesses. Note that the QSBS must be held for 5 years in order to qualify for the tax exclusion.