Tax Talk - Section 1202
Written By: Jen Barnes, CPA, MT
Section 1202 of the Internal Revenue Code provides for a tax incentive for individuals who invest in and sell stock of a qualified small business. The code section allows for gain exclusion of the gain. This is permanent exclusion of tax on the gain rather than not just a timing of taxation such as with other code sections.
Below is the chart of the exclusion under the One Big Beautiful Bill.
| Issue Date | Holding Period | Exclusion Percentage |
| 8/11/93 2/17/09 | >5 years | 50% |
| 2/18/09 9/27/2010 | >5 years | 75% |
| 9/28/2010 7/4/2025 | >5 years | 100% |
| 7/5/2025 present | >3 years | 50% |
| 7/5/2025 present | >4 years | 75% |
| 7/5/2025 present | >5 years | 100% |
For more information on how Sec. 1202 could benefit you, please contact Jennifer Barnes at 330-807-2766.
