[jessanqi]

Hi guys, can someone please kindly advise:

this question didn’t specify the acquire date for the QSBS. How should we do regard to this?

a noncorporate taxpayer can exclude 50% of capital gains from sale of QSBS, and increased to 75% if was acquired after Feb 17 309, before Sep 28, 2010, and 100% after Sep 27 2010.

Danielson invested $2,000,000 in DEC, a qualified small business corporation. Six years later, Danielson sold all of the DEC stock for $16,000,000, and purchased an office building with the proceeds. Danielson had not previously excluded any gain on the sale of small business stock. What is Danielson’s taxable gain after the exclusion?

The correct answer is A.  This question deals with the taxable gain after an exclusion on the sale of qualified small business stock held for six years.  An individual taxpayer can exclude 100% of the capital gain resulting from the sale of qualified small business corporation stock held for more than 5 years.  The amount of gain that is excludable is limited to the greater of $10,000,000 or 10 times the investor’s stock basis.  Here, the sale of the stock was $16,000,000 and the basis was $2,000,000 resulting in a gain of $14,000,000.  Since 100% of the gain can be excluded, Danielson’s taxable gain is $0.