1/ Has § 1202, which relates to qualified small business stock, been widely used since its enactment? 2/ What leads you to this conclusion? 3/ What rationale did Congress provide as a justification for the provision’s enactment? 4/ Do you believe that such rationale still is valid in today’s environment?
1/ Has § 1202, which relates to qualified small business stock, been widely used since its enactment?
2/ What leads you to this conclusion?
3/ What rationale did Congress provide as a justification for the provision’s enactment?
4/ Do you believe that such rationale still is valid in today’s environment?
The provision for eligible small company shares was incorporated into the law so as to stimulate financial involvement in smaller companies. This provision enables taxpayers to exclude some of the gain from the sale of eligible small company shares from the overall financial gain that is considered liable to taxation. The rationale behind this provision is that small business are typically the engine that drives economic activity and the creation of new jobs. Therefore, the purpose of this provision is to encourage investment in these businesses so that Congress can facilitate the creation of an environment that is conducive to economic activity and the creation of new jobs.
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