Save on Capital Gains Taxes

This tiny provision could save you big dough.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

A little-known provision in the tax code could result in big savings in capital gains taxes if you invest in entrepreneurial ventures. Under the provision (Section 1045), you're allowed to roll gains from one small-business investment into another and put off paying taxes owed from the initial investment, the money for which can be from any source. With this type of tax deferral, if you roll over all your gain, you may get 100 cents on the dollar when you reinvest. To qualify for the deferral, the investments must be considered Qualified Small Business Stock (QSBS), meaning the stock has to satisfy all the requirements stipulated in Section 1202 of the law.

SOURCE: Entrepreneur magazine

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Amplify your business knowledge and reach your full entrepreneurial potential with Entrepreneur Insider’s exclusive benefits. For just $5 per month, get access to premium content, webinars, an ad-free experience, and more! Plus, enjoy a FREE 1-year Entrepreneur magazine subscription.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur