Seattle – well in that case :)…..
Regarding capital gain on qualified small business stock. Is the exclusion 50% up to the greater of, a.) 10 times the investment or b.) $10M?
Based on the way the answer for an MCQ is worded it seems like it is actually 100% up to the greater of a. or b. (above)
and any remainder above that limit has a 50% exclusion. Can you clarify?
Example: Danielson invested $2M held 6 years, sold for $16M. Wiley states the entire $14M is excluded.
"A noncorporate taxpayer can generally exclude 50% (100% for 2012 and 2013) of the capital gain resulting from the sale of qualified small business stock held more than five years. The amount of excludible gain is subject to a cumulative limit of the greater of $10 million, or 10 times the investor’s stock basis. Here, the sale for $16,000,000 of qualified stock that was acquired for $2,000,000 results in a gain of $14,000,000. Since the $14,000,000 gain does not exceed 10 times Danielson’s stock basis, 100% of the gain can be excluded, resulting in a taxable gain after exclusion of zero"
What if it was sold for $24M? How much of the $22M gain is excluded, at what rate? And what is the remaining taxable amount?
A:[73]97 F:[74]85 R:86 B:[74]82
*NINJA 10 Pt. COMBO & Yaeger*
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