Tax Notes: Start-Up Investors Would Get Expanded Tax Break Under Senate Bill

The US Senate passed a reconciliation bill on July 1 that would expand the qualified small business stock (QSBS) gain exclusion. Although it was not included in the Senate-passed reconciliation bill, Senator John Cornyn has proposed a rule that would add an exclusion of 50% after the stock is held for three years, and 75% after four years. The graduated rate would also bring potential sellers of qualifying stock into alignment on whether and when to sell, Billy Abbott of O’Melveny & Myers LLP said.

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