Obama proposes no capital gains tax on qualified small business stock
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Obama proposes no capital gains tax on qualified small business stock
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Re: Obama proposes no capital gains tax on qualified small business stock
#2In Canada, capital gains are 50% taxable and the first $750k of capital gains on small business stock (subject to fairly reasonable definitions) is exempt.
I'm curious to know how this compares to other countries; could HNers from elsewhere please reply to this with the details from where they are?
Re: Obama proposes no capital gains tax on qualified small business stock
#3This is cool, but we incorporated in January. If this passes, do we redo it now?
Re: Obama proposes no capital gains tax on qualified small business stock
#4How are they defining small business? There are quite a few definitions that exclude startups.
Still, since I've spent the last few months hearing rumors about a bill allowing the president to seize any business that "threatens the economy," this is welcome news indeed.
Re: Obama proposes no capital gains tax on qualified small business stock
#5How are they defining small business? There are quite a few definitions that exclude startups. Still, since I've spent the last few months hearing rumors about a bill allowing the president to seize any business that "threatens the economy," this is welcome news indeed.
The article says:
"To qualify as a small business, the corporation, when the stock is issued, may not have gross assets exceeding $50 million (including the proceeds of the newly issued stock) and may not be an S corporation."
Re: Obama proposes no capital gains tax on qualified small business stock
#6too little too late mister president. I agree with winterspeak in that what we need is severely reduced payroll taxes to stimulate aggregate demand.
Re: Obama proposes no capital gains tax on qualified small business stock
#7so let me get this right...
currently you pay capital gains (28%) on 50% of the worth of sold stock. this proposal would eliminate that if the stock is held for 5 years?
correct?
Re: Obama proposes no capital gains tax on qualified small business stock
#8In Canada, capital gains are 50% taxable and the first $750k of capital gains on small business stock (subject to fairly reasonable definitions) is exempt. I'm curious to know how this compares to other countries; could HNers from elsewhere please reply to this with the details from where they are?
en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States
and, more generally en.wikipedia.org/wiki/Capital_gains_tax
Briefly, in the US cap gains are taxed at a special rate separate from regular income; if you hold the associated asset for at least 6 months, this rate only applies to half the capital gains, and if you fall into a low enough income bracket, your rate is significantly reduced.
Re: Obama proposes no capital gains tax on qualified small business stock
#9How are they defining small business? There are quite a few definitions that exclude startups. Still, since I've spent the last few months hearing rumors about a bill allowing the president to seize any business that "threatens the economy," this is welcome news indeed.
"..the corporation must be engaged in a trade or business other than: one involving the performance of services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services or any other trade or business where the principal asset of the trade or business is the reputation or skill of one or more employees; a banking, insurance, financing, leasing, investing or similar business, ..."
Looks like we're out, guys..
Re: Obama proposes no capital gains tax on qualified small business stock
#10so let me get this right... currently you pay capital gains (28%) on 50% of the worth of sold stock. this proposal would eliminate that if the stock is held for 5 years? correct?
no, people pay capital gains (15%) on 100% worth of sold stock.
if you qualify for small business stock + 5 years discount currently, you could pay capital gains (15%) on 50% of the stock, and AMT (28%) on the remaining 50%, giving an average tax rate of 21.5%, worse than existing capital gains, which clearly doesn't make sense, so no one does it.
under the new proposed system, if qualified, there would be NO capital gains on 100% of the stock, AND it would not be subject to AMT, meaning that the gain is completely tax free (minus state tax, of course).
the only restriction would be that you have to acquire stock in the company when it is worth less than $40M (easy) and hold it for 5 years (harder).