What have folks' experience been with Sec 1202, QSBS? Trying to learn more.

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September 11, 2020

by an investor from Northwestern University - Kellogg School of Management in Los Angeles, CA, USA

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Reply by an investor
from Northwestern University in 2602 Isabella St, Evanston, IL 60201, USA
Ray - we used 1202 for our bakery acquisition back in 2011, sold last year and original investors should not be paying any capital gains tax - federal and state (except for residents of CA. I'm sure we'll get audited but we have an opinion letter from BDO that says we followed the rules. We will likely use the structure again - maybe not in all circumstances. DM me and I can give you more details.
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Reply by a professional
from The University of Chicago in Chicago, IL, USA
Ray, what’s your question in particular? 1202 is often underutilized but does require certain criteria be met and it can be less applicable in M&A transactions where LLCs are more commonplace than, for example, venture capital and growth equity where its much more commonly available. Feel free to send a direct message and happy to help.
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