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Many states provide tax credits to angel investors for investments made into companies in their state, some of which provide a credit for ~25% of the invested amount! The CapGains platform helps identify whether businesses may qualify for these tax credits.

The “original QSBS”, IRC Section 1244, provides that certain capital losses may be deducted against ordinary income. This benefit is generally available to investors in the first $1M of equity invested into the company as well as meeting certain other QSBS related criteria.

Qualified Opportunity Zones were created to help drive investment into certain regions of the United States, offering an up to 100% capital gains tax exclusion for qualifying investments. Qualified Opportunity Zone Businesses (QOZB) are businesses that operate within one of the ~8,700 Opportunity Zones. The CapGains platform helps identify whether businesses may qualify as QOZBs.

Qualified Small Business Stock (QSBS) helps to drive innovation in the US by offering an up to 100% capital gains tax exclusion for shareholders who obtained stock early in a company’s life cycle. In addition to holding the stock for at least 5 years, there are multiple requirements that have to be met by the issuing company, the security and the taxpayer in order to be eligible to realize the benefits of QSBS. Learn more about the QSBS eligibility requirements at QSBSExpert.com and track your eligibility through the CapGains platform.

The QSBS criteria contain many “tripwires” that could cause shares to lose their eligibility. These could be actions taken by the company, such as changes in the business, the utilization of assets, repurchasing stock and more - or can be actions taken by the shareholder such as certain transfers, hedging transactions or redemptions. The CapGains platform helps you avoid these tripwires to keep your gains QSBS eligible.

Certain actions taken by a shareholder can help to optimize the QSBS benefits, however such actions need to be taken in a timely manner. The CapGains platform helps to identify such opportunities and help you achieve them.

There are certain regulations specific to the application of QSBS to Venture Capital funds and other partnerships. In general, partners need to have been a partner at the time the partnership acquired the QSBS stock and all times thereafter, but there is much more to both what it takes for partners to qualify, how partnerships report QSBS to their partners, how QSBS is applied to carried interest and various other considerations.