What is Qualified Small Business Stock?

Legal Definition
Under § 1202 of the Internal Revenue Code, stock of a domestic C corporation whose aggregate gross assets do not exceed $50,000,000 before or immediately after issuance. A taxpayer who acquires qualified small business stock at its original issue and holds it for more than five years may exclude 50 percent of any gain from a sale or exchange of that stock from his or her gross income.
Illustrative caselaw
See, e.g. Natkunanathan v. Comm'r of Internal Revenue, T.C.M. 2010-15 (T.C. 2010).
See also
  • Income tax
  • Deduction
  • Tax credit