Steven A. Holt, Chair of the Tax, Trusts, and Estates Practice Group at Mandelbaum Barrett PC, was featured in New Jersey Business Magazine for his article, “Consider the Qualified Small Business Stock Exclusion.” He explores a powerful, yet often overlooked, tax planning opportunity for business owners preparing for a sale.
Holt explains that Section 1202 of the Internal Revenue Code allows eligible taxpayers to exclude up to 100% of gains from the sale of Qualified Small Business Stock (QSBS), subject to requirements. Federal tax savings can be substantial, though state treatment varies, requiring careful planning.
The article also covers changes under the One Big Beautiful Bill Act (OBBBA), effective for QSBS issued after July 4, 2025, including a $10 million per-taxpayer, per-issuer cap and rules tied to holding periods. Holt outlines what qualifies as a small business — generally a domestic C corporation with at least 80% of assets in active business and below certain asset thresholds.
Holt emphasizes that QSBS planning should start early, noting that selling stock rather than assets and operating as a C corporation are often necessary to maximize benefits, making integration into broader tax and exit strategies critical.
Read the full New Jersey Business Magazine article here.
For any questions, reach out to Steven A. Holt at sholt@mblawfirm.com or at 973-243-7941.