by Mike Baker | Mar 23, 2024
The Active Business Test Here’s a summary of how the qualified small business stock (QSBS) rules limit the types and amounts of passive assets a corporation can hold while maintaining QSBS eligibility. 1. General Rule The Active Business Test restricts how much of the...
by Mike Baker | Feb 1, 2024
Updated August 20, 2024 Certain recent changes to tax code Section 174 may negatively affect companies that have research and development (R&D) expenses. Here’s the basic problem: If in 2023 you spent $1M to make $1.2M then you have $200K of profit. If we lived...
by Mike Baker | Jan 12, 2024
Let’s say you have some intellectual property (IP) that you’d like to give to a corporation in exchange for shares of its common stock. The IP and stock are both worth $10,000 and you have tax basis in the IP of $800. Normally such an exchange would...
by Mike Baker | Dec 26, 2023
Let’s say you’re the majority shareholder of ABC, Inc., a C corporation, which just sold substantially all of its assets in a taxable asset sale. The deal consideration consists of three parts (i) $30M to be paid at closing, (ii) $3M which is being held...
by Mike Baker | Dec 7, 2023
So, your company is being sold and you want to know whether you should exercise your stock options prior to closing. First you should confirm whether the transaction agreement (i.e., stock purchase agreement, asset purchase agreement, or merger agreement) provides...
