Obama proposes no capital gains tax on qualified small business stock

Post by Radix » Thu, May 14, 2009, 5:38 PM UTC

anamax wrote: post #35

drusenko wrote: post #10

Earlier quoted context omitted.

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…

> the only restriction would be that you have to acquire stock in the company when it is worth less than $40M (easy) Not really. Most of us aren't accredited investors, so we can't buy stock in small companies without starting them, working for them, or being related to the founders. Reduced taxation on small biz stock will make successful small biz more profitable, so it's a big deal for angels, VCs, and their limit…

Post by anamax » Thu, May 14, 2009, 6:41 PM UTC

Radix wrote: post #41

anamax wrote: post #35

Earlier quoted context omitted.

> the only restriction would be that you have to acquire stock in the company when it is worth less than $40M (easy) Not really. Most of us aren't accredited investors, so we can't buy stock in small companies without starting them, working for them, or being related to the founders. Reduced taxation on small biz stock will make successful small biz more profitable, so it's a big deal for angels, VCs, and their limit…

Most of us aren't accredited investors, so we can't buy stock in small companies without starting them, working for them, or being related to the founders. What is the reasoning behind preventing people from investing into companies? Is it just to keep people from being swindled? It seems off to me.