VW Blog Tax

QSBS offers major tax savings, but eligibility under Section 1202 is complex. This article highlights key risks—from stock issuance and asset limits to redemptions and transfers—that can jeopardize the exclusion.

Many early-stage companies elect S corporation status to take advantage of the favorable tax treatment. However, as companies scale and plan for funding or an eventual exit, they often convert to a C corporation to qualify for the QSBS exclusion under Section 1202. This article explains the challenges S corporations face when looking to convert, and outlines the strategies that can help founders satisfy the requirements under Section 1202 and preserve eligibility for the tax exclusion at exit.

Congress made major changes to QSBS, expanding who qualifies and how much gain can be excluded. The asset cap rose to $75 million, and investors can now exclude up to $15 million or 10× their basis—whichever is greater. Shorter holding periods also now qualify for partial tax breaks. These changes open the door for both investors and companies to benefit from this powerful tax incentive.

Startup founders, early employees, and investors may be missing out on a major tax advantage. Thanks to the Qualified Small Business Stock (QSBS) federal income tax exclusion, eligible stockholders can potentially exclude up to 100% of capital gains upon an exit—saving millions in federal taxes. Understanding the key requirements and potential pitfalls of QSBS can make a significant impact on your financial outcome. Here’s what you need to know to maximize this powerful tax benefit.

If you’re a founder or an early employee at a startup, equity compensation is likely a significant part of your financial upside. However, the promise of equity can come with a maze of tax implications. Enter the 83(b) election: a relatively simple IRS filing that can save you thousands (or even millions) in taxes down the road. Despite its importance, many people overlook it—sometimes to their detriment.

This blog discusses which types of equity plans are, and are not, available for an LLC or corporation taxed as an s-corporation.

This blog discusses the differences between an acquisition structured as an Asset Sale versus one structured as a Stock Sale, as well as the Section 338(h)(10) election, which is used when the Buyer needs the transaction to qualify as a stock sale, but wants the advantages of asset sale tax treatment.

If you have tried to sell or buy a business that is an S-corporation for tax purposes recently, you may have run into the newly popular structure called the “F-Reorganization.” But what on earth is an F-reorganization?  And why is it so popular? This blog post explains the structure.

This blog post explains why the asset allocation matters, whether you are a buyer or a seller, and why this critical issue should not be an afterthought for the post-closing period.

Issuing equity in LLCs can be complicated and lead to additional compliance and reporting obligations, and great care should be taken when determining the right equity structure. This blog is meant to serve as a brief introduction to four common ways of issuing equity in an LLC to compensate key service providers or employees.