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New Law Creates Zero Percent Effective Tax Rate for Certain Qualified Small Business Stock

October 14, 2010

By Douglas A. Schaaf & Erika B. Mayshar

For investors who purchase certain qualifying stock by December 31, 2010, at least $10 million of future appreciation can be entirely excluded from federal income tax. This recently-enacted tax break, applicable to qualified small business stock, creates a powerful incentive for investors to act quickly and invest in qualifying companies before year-end.