Can a partnership own §1202 stock?
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Charles Levun, J.D.
Code §1202 stock is stock of a C corporation that operates a qualifying business. If held for more than five years, up to 100% of the gain on sale is tax-free, but limited to the greater of $10,000,000 or 10 times “§1202 basis.” Qualifying stock can be held by a partnership and can be distributed by a partnership to its partners. However, beware that a contribution of §1202 stock to a partnership, e.g., a family investment partnership, causes the stock to loses its qualification as §1202 stock.
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42 weeks ago
Great question! I really enjoy answering questions from CPAs and other tax professionals.
Also, we cover this topic, as well as many other at our two flagship flow-though tax planning seminars:
• Forum – our advanced course with the most recent structuring techniques for closely held businesses
• Fundamentals of Flow-Through – an intermediate course that provides a solid foundation for using flow-through entities
Both are a fast-paced combination of exhibits and strategic/tactical applications presented in a transactional manner. And both include live Q&A with our faculty members – ensuring you get the answers you need to your real-world flow-through tax issues.
You can learn more and register here: www.taxforums.com/