- Successful US entrepreneurs, venture capitalists and early startup employees are using the Qualified Small Business Stock (QSBS) provision to partially or completely avoid capital-gains taxes.
- Shares are eligible for QSBS if they’re issued when a company has gross assets of $50M or less.
- “If you hold stock for at least 5 years, you can avoid taxes on $10-100 million of any gains”.
- The incentive was created in 1993 to help small companies attract capital.
- Corporations can use accounting maneuvers to understate gross assets.
