This year,Jonathan sold some qualified small business stock that he acquired in December 2010.His basis in the stock was $100,000 and he sold it for $400,000,resulting in a $300,000 gain.How much of Jason's gain is taxable?

Question

Quizplus · Accepted Answer

The gain on the sale of qualified small business stock is eligible for a 100% exclusion from federal income tax, provided that the stock was held for more than five years. In this case, Jonathan held the stock for more than five years, so his entire gain of $300,000 is tax-free.

This Year,Jonathan Sold Some Qualified Small Business Stock That He