Small Business Stock Gains: Exclusion and Deferral Opportunities 2024
2.00 Credits
Member Price $89
Non-Member Price $119
Overview
Review the availability and application of three special rules that allow exclusion or deferral of gain from the sale of the stock of a corporation not making the S corporation election. IRC 1202 provides that all or part of the gain from the sale of “qualified small business stock” can be excluded from gross income. IRC 1045 describes situations when the gain from the sale of “qualified small business stock” can be deferred. To understand the application of these two favorable provisions, the meaning of “qualified small business stock” and other requirements and limitations must be understood. IRC 1042 allows the deferral of gain from the sale of corporate stock to an employee ownership plan ( ESOP). This deferral requires a qualified reinvestment in an adequate amount at the right time. Study how these three provisions apply in the context of tax planning for corporate businesses.
Highlights
- IRC 1202-The benefit of the exclusion
- IRC 1202-The requirements that must be met
- IRC 1202-Limitation on the amount of the exclusion
- Comparison of the IRC 1202 exclusion to making S corporation election
- IRC 1045-The benefit of the deferral
- IRC 1045-The requirements that must be met
- The basics of Employee Stock Ownership Plans (ESOP)
- IRC 1042-The benefit of the deferral
- IRC 1042-The requirements that must be met
Prerequisites
Knowledge in taxation.
Designed For
CPAs and attorneys
Objectives
- Determine the benefit of the IRC 1202 exclusion
- Identify the Section 1202 requirements that must be met and the limitation on the amount of the exclusion
- Determine the benefit of IRC 1045 deferral
- Identify the requirements that must be met to qualify for IRC 1045 deferral
- Determine the benefit of the IRC 1042 deferral
- Identify the requirements that must be met to qualify for IRC 1042 deferral
Preparation
None
Leader(s):
Leader Bios
John McWilliams, CalCPA Education Foundation
<b.John McWilliams, CPA, JD, is Professor of Accounting at Golden Gate University. Previously he was a Professor of Accounting at San Francisco State University. He began his career as a tax adviser with a Big Four CPA firm. For more than 30 years, while teaching, he has been a tax adviser to lawyers and CPAs regarding the tax matters of their clients. Areas of expertise include tax issues related to buying and selling privately held businesses, financially troubled businesses, business restructuring and reorganization and ownership succession to employees or family members. Mr. McWilliams is active in CalCPA, having served as president of the San Francisco Chapter, chair of the Financial Literacy Initiative, a member of the CalCPA Board of Directors serving as Vice Chair. He is currently a member of the Taxation Committee, the Financial Literacy Committe, and the Accounting Education Committee. He has served as a California representative to the AICPA Council and is currently a member of the AICPA Financial Literacy Commission. Mr McWilliams is author of two chapters of the CCH Expert Treatise Library : Federal Taxation of Corporations & Shareholders.
Non-Member Price $119
Member Price $89