Category: Corporations
New Jersey GIT Adds IRC § 1202 Exclusion for QSBS Gains
New Jersey has aligned its Gross Income Tax with the federal exclusion of capital gains on Qualified Small Business Stock (QSBS) under Section 1202 of the federal Internal Revenue Code of 1986 (“IRC”). The New Jersey exclusion is effective for tax years beginning January 1, 2026. IRC § 1202 allows…
QSBS Tax Benefits Enhanced Under the OBBBA
Since its enactment as part of the Omnibus Budget Reconciliation Act of 1993, Section 1202 of the Internal Revenue Code has provided an exclusion for gain from the sale of qualified small business stock (QSBS) held for more than five years. To qualify as QSBS, the stock must be from…
Zeroing Out of Profits by Closely Held Corporations
Shareholders of C corporations sometimes pay themselves bonuses in an amount that eliminates corporate profits, thereby eliminating the corporate tax that would result if paid on dividends (resulting in a “double tax”). However, several recent cases shed light on how paying supplemental shareholder compensation may backfire if not properly implemented….