Obama proposes no capital gains tax on qualified small business stock

Startup Company Lawyer

The budget proposal would modify IRC Section 1202 to provide for a complete exemption from capital gains tax for qualified small business stock issued after February 17, 2009 and held for five years, and the amount excluded would not be added back for alternative minimum tax purposes. ELIMINATE CAPITAL GAINS TAXATION ON INVESTMENTS IN SMALL BUSINESS STOCK. The taxable portion of the gain is taxed at a maximum rate of 28 percent.

Sideways Startups: Donating Private Stock

Gust

Donations of private stock enable investors, founders and employees to support charitable causes and contribute to the community while receiving simultaneous benefits in the form of substantial cash savings from reduced taxes as well as bypassing capital gains taxes. original cost) – and in the cases of entrepreneurs who have founded companies, the cost basis is effectively zero – and a significant current market value that would result in large capital gains taxes if sold.

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Addressing the Dreaded Lifestyle Outcome

Gust

Three outcomes dominate exits of angel-funded companies: Dead bugs – Startups that go out of business, returning less-than-invested capital to angels (usually zero). Positive exits – Companies that liquidate with capital gains to investors, usually via a cash sale to a larger company. While IPOs are possible, they are very rare for angel-funded companies. The exits can range from simply return of Read more >. Industry Experts

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Addressing the Dreaded Lifestyle Outcome

Gust

Three outcomes dominate exits of angel-funded companies: Dead bugs – Startups that go out of business, returning less-than-invested capital to angels (usually zero). Positive exits – Companies that liquidate with capital gains to investors, usually via a cash sale to a larger company. While IPOs are possible, they are very rare for angel-funded companies. The exits can range from simply return of Read more >.

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[Infographic] How Do Taxes Affect Your Startup?

YoungUpstarts

On top of that, there’s the usual sales tax and capital gains tax to cover. It is uncommon for startups, especially new ones, to limit their expenses and bootstrap. It is one of the commonly used strategies to survive, especially in today’s competitive market.

Do You Need An ETF Or A Mutual Fund?

YoungUpstarts

Because these funds are traded in much the same way stocks are, there is less gain that leads to tax liability. Investors who want to eliminate or reduce their capital gain liability may find a good ally in these funds.

Understanding Stock Options

YoungUpstarts

Profit from ISOs have the potential to be taxed as long-term capital gain, which is a considerably lower rate than NQSOs, which are generally taxed as ordinary income. This achieves the potential for long-term gain treatment on a sale at an earlier date.

Why I Don’t Celebrate Income Inequality

Both Sides of the Table

Yes, income inequality exists and yes it’s a natural consequence of capitalism and other forms of government are decidedly worse than capitalism because they inefficiently create and allocate resources. They get to have “long-term capital gains” taxes which are much lower than short-term capital gains taxes paid by people who have stock options or income taxes paid to workers. The system can be juiced in favor of capital over labor.

The Tax Advantages To Investing In Oil And Gas Your CPA’s Probably Never Heard Of

YoungUpstarts

On the other side of the coin, TDCs are any asset or capital expenditure that can be recovered later. Casey Minshew is the Chief Operating Officer (COO) for EnergyFunders , an online marketplace evolving the way capital investment and energy projects come together.

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5 Reasons Why Investors Are Doing More 1031 Exchanges Than Ever

YoungUpstarts

This is highly beneficial because it stops you from having to pay capital gains taxes on the sale of the old property.

Sideways Startups: An Investor’s Dilemma

Gust

1) Many flop (companies that do not return capital to investors) 2) some companies provide angels with an upside on their investment and 3) some companies go sideways. Current US tax regulations stipulate capital gains tax rates for most angel investment with positive returns. For many of those companies that fail, investors can write-off their investment against other income (ordinary income or capital gains, depending on the situation).

Why You Can’t Afford To Wait To Create A Succession Plan For Your Small Business

YoungUpstarts

Just remember if you sell the company before you die, you may have to pay capital gains tax. Large corporations have the leisure of falling back on a board of directors to them help look for a new president or CEO, when one retires, quits, becomes incapacitated, or unexpectedly dies.

How Your Business Could Generate Extra Income Through Investments

YoungUpstarts

This means that there’s no need to tie up the full market value of purchasing the equivalent stock position and traders can instead open larger position than their capital would normally permit. ETX Capital gives you access to up to 6,000 markets, and can help you stay informed.

Encouraging empowering innovation

The Equity Kicker

reduce capital gains tax for assets held for a long period. give capital gains tax breaks to entrepreneurs. Support the venture capital system with direct investmemt into funds. Yesterday I wrote about the distinction between empowering innovation that creates jobs and economic growth and efficiency innovation which improves profits but destroys jobs and does little for growth.

This National Entrepreneurship Month, Listen And Learn With These Bestselling Audiobooks

YoungUpstarts

Capital Gaines: Smart Things I Learned Doing Stupid Stuff. Written By: Chip Gaines, Narrated By: Chip/Joanna Gaines. Before becoming a HGTV star, renovation expert, bestselling author, husband and father, Chip Gaines was a serial entrepreneur.

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Why VAT Technology Plays An Important Role

YoungUpstarts

These are income taxes, employment taxes, a corporation tax, a capital gains tax, an inheritance tax, excise duties on cigarettes, alcohol, and petrol, import duties, property taxes, and specialist taxes.

Can An Investment Bank Enhance Your Startup Future?

Startup Professionals Musings

A few, like Silicon Valley Bank (SVB), actually do provide management services to startups, invest in startups, or provide early-stage venture capital, but that is not called an investment service and is part of a function called Emerging Technologies, or sometimes Private Equity.

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With New 21 Percent Corporate Tax Rate, S-Corps Are Taking A Second Look At C-Corp Status

YoungUpstarts

A second limitation to the deduction comes in having to factor in the shareholders’ taxable income, less their capital gain income, multiplied by 20 percent. by Lance Christensen, Susan Jacobini Harrington, and James Graff, Partners at Margolin, Winer & Evens LLP.

Exit Activity Up 25% in 2010, as Signs Point to 2011 as "The Year of the IPO"

ReadWriteStart

While the number of exits and the capital gained through them were up, these figures still don't match 2007 levels.

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Measuring prosperity

The Equity Kicker

The major differences between the consumption and income measures come from realised capital gains, dramatic increases in public and private benefits (e.g. There is a related point that income is often calculated on a household basis but because average households now have fewer people in them a decline in household income doesn’t imply a decline in per capital income. A month or so ago I wrote about that Mismeasurement may be at the heart of the productivity paradox.

A Venture Capital History Perspective From Jack Tankersley

Feld Thoughts

In January, Jerry Neumann wrote a long and detailed analysis of his view of the VC industry in the 1980’s titled Heat Death: Venture Capital in the 1980’s. The key reason for the explosion in capital flowing into the industry, and therefore the large increase in practitioners, had nothing to do with 1970’s performance, early stage investing, or technology. Continental Capital*. $ 250,000. KPC&B II. $ 775,000. Venture Capital 1980 jack tankersley Jerry Neumann V

Mr. Feld Goes to DC To Talk About Innovation

Feld Thoughts

Cut capital gains taxes to 1% for startups. I’m also participating in a roundtable titled Implementing The National Broadband Plan and Protecting Consumer Choice: The Venture Capitalist Perspective with fellow VCs Brad Burnham from USV and Santo Politi from Spark Capital. I’m in Washington DC again – this time to talk about innovation.

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French Tax Law for Start-ups: Ringing the Alarm Bell

Cracking the Code

This post is a translation of the article: « Pigeons » : le cri d'alarme d'un fonds américain published on LaTribune (12/10/2012) and is a response to the proposed tax law proposed by the government of Francois Hollande, suggesting to tax all capital gain at the same level than salaries or 60%.

Champing At The Bit: Can You Pay Your Workers In Bitcoin?

YoungUpstarts

This might complicate payroll reporting, tax withholding, and capital gains and losses reporting, and create an overwhelming administrative burden for your human resources department. by Rich Meneghello, Adam Bridgers, and Benjamin Ebbink of Fisher Phillips.

What’s a Fair 409A Discount?

VC Adventure

Back in the olden days of venture capital, company boards had wide discretion in pricing company options. Quick note: I’m not your lawyer. I’m not giving legal advice in this post.

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Nokia as “He Who Must Not Be Named” and the Helsinki Spring

Steve Blank

While the government says they love startups, the first thing they did this year is raise the capital gains tax. Filed under: Business Model versus Business Plan , Customer Development , Teaching , Venture Capital. Business Model versus Business Plan Customer Development Teaching Venture CapitalI was invited to Finland as part of Stanford’s Engineering Technology Venture Program partnership with Aalto University.

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How Federal Government Can Help Entrepreneurship

Feld Thoughts

Make it simple – eliminate capital gains if an individual (who is an accredited investor) invests equity (i.e. This afternoon in Boulder I’ll be on a panel as part of the White House Startup America Roundtable. If you weren’t invited to the event, there is a web site called Reducing Barriers to Innovation that you can participate in. Over the past few years, I’ve spent some time thinking about how the government can help entrepreneurship.

Startups Get No Help From an Investment Bank

Startup Professionals Musings

A few, like Silicon Valley Bank (SVB), actually do provide management services to startups, invest in startups, or provide early-stage venture capital, but that is not called an investment service and is part of a function called Emerging Technologies, or sometimes Private Equity.

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Introducing the Cap Table and Hiring the CTO

Feld Thoughts

Later, if they sell, the low tax basis and capital gains tax rates result in a lower tax liability than if they didn’t file the 83(b) election. Rather, it gets recorded in a document called the Capitalization Table (or “Cap Table”), which shows the ownership stake each person or entity has in the business. As Finance Fridays continues, we are introducing the concept of the Cap Table.

Thoughts on Convertible Notes

K9 Ventures

When an investor buys equity in a priced round, the capital gains clock on that stock starts as of the date of investment. However, in the case of a note, and especially for notes with long maturity dates, the capital gains clock doesn’t start ticking till the the note converts.

When do I need to incorporate a company?

Startup Company Lawyer

Incorporating a company and demonstrating that it is a “real&# business with sufficient capital is typically a prerequisite to a visa application. Starting capital gains holding period in the event of a stock sale. If a founder sells stock of a company in a taxable transaction and it is held for greater than one year, then the capital gains tax rate is 15% for founders in the 25% tax bracket and higher. [It's been awhile since I wrote anything.

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Convertible Debt: Worst Form Of Seed Financing — Except For All The Others

Gust

How to finance a new seed-stage startup? Equity? Convertible debt? Convertible equity? As of August 2010, Paul Graham famously proclaimed , “Convertible notes have won. Every investment so far in this YC batch (and there have been a lot) has been done on a convertible note.”

Why Startups Should Pay Attention to Herman Cain’s 9-9-9

Both Sides of the Table

In case you don’t know, “the “9-9-9 plan” would replace all current taxes (including the payroll tax , capital gains tax , and the estate tax ) with 9% business transaction tax; 9% personal income tax rate, and a 9% federal sales tax.”

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Property Investing 101

Start Up Blog

Period buildings (unique styles, historical) have higher capital growth than the average property. High capital growth properties & areas, tend to have lower rental yields. High yield properties tend to have low capital growth. Areas going through gentrification usually have greater capital growth. You can draw out profits (capital gain) from a property that has grown in value and not pay tax on it.

Use Investment Banks for Exit, not Startup

Startup Professionals Musings

A few, like Silicon Valley Bank (SVB), actually do provide management services to startups, invest in startups, or provide early-stage venture capital, but that is not called an investment service and is part of a function called Emerging Technologies, or sometimes Private Equity.

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France invents “Slow Innovation”: deconstructing Montebourg at #leweb

Fred Destin

Minister Montebourg (to his credit) took a chance at LeWeb to talk about innovation and the French policy towards innovation, together with Loic Le Meur, Fabrice Grinda and Jeff Clavier.

The Importance of Vesting Schedules for the Founders

Scott Edward Walker

Instead, the founder buys all of his stock on day 1 (subject to the vesting schedule) and then solely pays capital gains tax upon its sale. One of the biggest mistakes I see startups make is failing to set-up vesting schedules for the founders.

Is it Time for You to Earn or to Learn?

Both Sides of the Table

If you never raise another round of venture capital (a big if) and if your company is sold for the normal venture exit ($50 million on average for 200 or so annually that get sold) then what is your stake? That’s an after-tax gain of $287,500 / year for 2 years.

5 Critical Tips to Reduce Your Business Taxes This Year [WEBINAR]

Up and Running

That’s a little more complicated, because there can be dividends, interest or capital gains, and there’s different tax rates for those. The last one here is your long-term capital gain.

Salesforce Acquires Radian6: How to Earn $2,850/hour

Growthink Blog

Even though Chris and Chris only owned a small percentage of Radian6 after raising rounds of venture capital, they will still walk away with $14 million each according to CBC News. CRM giant Salesforce.com just acquired Radian6, a social media monitoring platform, for $326 million.

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Startup founders: Here’s why vesting is your best friend

The Next Web

Vesting means that at the very beginning each founder gets his or her full package of stocks at once to avoid getting taxed for capital gains; but, the company has the right to purchase a percentage of the founder’s equity in case he or she walks away.

Venture Capital Q&A Session

Both Sides of the Table

We received so much positive feedback from our This Week in Venture Capital show walking through valuation calculations & term sheets that we decided to do a Q&A show this week to address topics that entrepreneurs want to learn about.

Top 29 Startup Posts May 2010

SoCal CTO

Draw Your Ideas - A VC : Venture Capital and Technology , May 16, 2010 I saw Jack Dorsey give this talk at The 99% Conference last month. The Yin and Yang of Product and Engineering - A VC : Venture Capital and Technology , May 22, 2010 For a tech company, product and engineering are the heart and soul of the business. This probably hurt Zynga’s profitability but also helped them fend off less well-capitalized rivals.