A Call for IRS Guidance on the Information Corporations Give Shareholders to Show That Stock Is QSBS
Author: Andrew L. Gradman.
Source: Volume 41, Number 01, Fall 2023 , pp.3-22(20)
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Abstract:
When a shareholder sells stock and is deciding whether to claim QSBS tax benefits, the key information is supplied by the underlying corporation. Yet the IRS has never sought to regulate how corporations do this. These corporations don’t necessarily share the interest of the shareholder, or of the IRS, in clear and accurate reporting. As a result, shareholders often claim QSBS tax benefits without really knowing whether they are eligible. This article proposes a uniform checklist that corporations can use to collect and report the relevant data. It also recommends that the IRS issue guidance that would motivate corporations to use this checklist.Keywords: QSBS, Qualified Small Business Stock, IRC Sec. 1202, startup, VC (venture capital), capital gain, corporate taxation; exclusion of gain, tax incentives
Affiliations:
1: Falcon Rappaport & Berkman LLP.