FORM Tax Year 2005 Small Business Capital Company Report for Investors Identification Number Name of-2025

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The QSBS tax exclusion is set forth in Section 1202 of the U.S. Internal Revenue Code. When shareholders sell or exchange their qualified stock, the exclusion can provide a break on capital gains taxpotentially up to 100% exclusion of tax on capital gains.
A domestic corporation must file Form 1120, U.S. Corporation Income Tax Return, whether it has taxable income or not, unless its exempt from filing under section 501.
1993 P.L 103-66 Section 1202 Passed Section 1202 provided investors a 50% tax exclusion on capital gains up to the greater of $10M or 10x the taxpayers basis. The capital gains rate was 28% at the time, and therefore QSBS provided up to a 14% tax savings.
Section 1244 stock is a stock transaction pursuant to the Internal Revenue Code provision that allows shareholders of an eligible small business corporation to treat up to $50,000 of losses (or, in the case of a husband and wife filing a joint return , $100,000) from the sale of stock as ordinary losses instead of
QSBS limits and risks To qualify for QSBS treatment, the stock must be held for more than five years. Falling short of this time frame can lead to the forfeiture of tax benefits. QSBS status applies to companies with gross assets that do not exceed US$50 million immediately after the stock issuance.
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Qualified small business stock (QSBS) is a type of share issued by a C corporation (C corp) that meets requirements in the Internal Revenue Code, specifically Sections 1202 and 1045. QSBS offers substantial tax benefits to shareholders, most notably founders and early investors.

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