By Paul DiSangro and Sarah Nelson
Take advantage of the brief window to issue stock in a qualified small company before January 1, 2011. Holders of qualifying stock will pay no tax or AMT if held for more than five years. How?
· U.S. companies issue stock in exchange for money, property, or as compensation for services before January 1, 2011 (the exercise of warrants or the conversion of convertible notes to stock is treated as newly issued stock at the time of such exercise or conversion)
· in a corporation that has $50 million or less of gross assets
· that has a qualified active trade or business like technology, biotech, and alternative energy.
· Hold the stock for at least 5 years.
· When you sell, you exclude the gain (up to the greater of $10 M or 10x your basis).
· You pay no tax or AMT on the excluded gain.
For more information on this issue or any tax matter, please contact your regular Nixon Peabody attorney or:
· David K. Cheng, Partner, at +852 9307 3900 (Hong Kong), 415-984-8342 (San Francisco), and +86 21 6137 5568 (Shanghai) or firstname.lastname@example.org.
· Paul DiSangro, Partner, at 415-984-8352 or email@example.com
· Christian M. McBurney, Partner, at 202-585-8358 or firstname.lastname@example.org
· Jeff Selman, Partner, at 650-320-7722 or email@example.com
· Mavis Yee, Partner, at 650-320-7717 or firstname.lastname@example.org
· Sarah Nelson, Counsel, at 212-940-3052 or email@example.com