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Can a partnership own §1202 stock?

Limited Liability Corporation (LLC) Partnership Partnership Tax Return
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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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