Erik purchased qualified small business corporation stock on December 1,2010 and sold it for a $500,000 gain on December 12,2016.The gain subject to tax is

Question

Quizplus · Accepted Answer

Under the IRS rules for qualified small business stock (QSBS), if the stock was held for more than five years, up to 100% of the gain can be excluded from taxable income, subject to certain limitations. Since Erik held the stock for more than five years, the gain is not subject to tax.

Erik Purchased Qualified Small Business Corporation Stock on December 1,2010