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Taxes |
I'm neither a tax lawyer, nor a tax advisor. Do not take anything in this document as tax advice. Please consult a qualified CPA or a tax attorney before using any of this.
Please refer to IRS Section 1202 first. In the context of tech startups, some or all of your gains could be exempt from federal taxes if you exercised your stock early enough. In this case it's probably a good idea to get documentation from your startup that the company complied with Section 1202 requirements. Here's a sample template for that.
{% highlight liquid %} Statement Regarding Qualified Small Business Stock
XYZ (the “Company”) is providing the following declarations regarding the Company, which may be relevant for determining whether proceeds from the sale of certain shares of Company stock are eligible for the federal tax benefits available to Qualified Small Business Stock (“QSBS”) under Section 1202 of the U.S. Internal Revenue Code, as amended.
- Date of Incorporation: The Company was incorporated as a C-corporation in on , and is registered to do business in
- Value of Gross Assets: The Company believes that its gross assets first exceeded $50,000,000 in <MONTH, YEAR>.
- Use of Assets: The Company believes that, since the founding of the Company through the present day, more than 80% of its assets have been used in the active conduct of a trade or business.
{% endhighlight %}