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taxmap/pubs/p544-008.htm#en_us_publink100072464

Sales of Small Business Stock(p20)


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previous topic occurrence Section 1202 Exclusion next topic occurrence

If you sell qualified small business stock, you may be able to roll over your gain tax free or exclude part of the gain from your income. Qualified small business stock is stock originally issued by a qualified small business after August 10, 1993, that meets all 7 tests listed in chapter 4 of Publication 550.
taxmap/pubs/p544-008.htm#en_us_publink100072465

Rollover of gain.(p20)


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You can elect to roll over a capital gain from the sale of qualified small business stock held longer than 6 months into other qualified small business stock. This election is not allowed to C corporations. If you make this election, the gain from the sale generally is recognized only to the extent the amount realized is more than the cost of the replacement qualified small business stock bought within 60 days of the date of sale. You must reduce your basis in the replacement qualified small business stock by the gain not recognized.
taxmap/pubs/p544-008.htm#en_us_publink100072466

Exclusion of gain.(p20)


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You may be able to exclude from your gross income 50% of your gain from the sale or exchange of qualified small business stock you held more than 5 years. This exclusion is not allowed to C corporations.
Your gain from the stock of any one issuer that is eligible for the exclusion is limited to the greater of the following amounts.
taxmap/pubs/p544-008.htm#en_us_publink100072467

More information.(p21)


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For more information on sales of small business stock, including stock held by a partnership, S corporation, regulated investment company, or common trust fund, see chapter 4 of Publication 550.