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IRC SECTION 1202 CONCEPT

Congress recently provided for 100% tax-free sales of certain businesses to incentivize venture capital investments and entrepreneurship.

SUMMARY OF 

IRC SECTION 1202 CONTENT:

This tax break is found in IRC 1202 and applies to the sale of corporate stock for owners of C-Corporations where the stock has been held for at least 5 years within certain specifics industries. These industries are generally active businesses that are not predominantly real estate or professional services.

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The benefits of the IRC Section 1202 are as flows:

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  • Eliminate federal (and possibly state) gains tax on the sale of your business if it meets the criteria

  • Offers complete liquidity from the sale of the stock

  • Eliminates any on-going structure or fees

  • Gives the seller complete control of the proceeds from the sale of the stock

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IRC SECTION 1202

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Learn more about the instances where IRC Section 1202 applies and how owners of C-Corps can benefit from this strategy.

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IRC Section 1202

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