What are the tax implications of making a seed investment in a startup? as they raise money and the valuation increases or they merge or sell to another private company and preferred stock converts at a higher value?

Capital Gains Tax

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There are no tax implications of investing in a company. The amount of your investment is your basis for gain or loss when the investment is sold. In the event of a merger, buy out, or conversion of the investment to another type of investment, there may or may not be any tax consequences depending on how the deal is structured and what you receive. If the investment is held for more than 12 months, any gain is subject to the preferred capital gain rates.

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What are the tax implications of making a seed investment in a startup? as they raise money and the valuation increases or they merge or sell to another private company and preferred stock converts at a higher value?

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What are the tax implications of making a seed investment in a startup? as they raise money and the valuation increases or they merge or sell to another private company and preferred stock converts at a higher value?

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