Published: Oct. 17, 2023, 1 p.m.
In this episode of the Main Street Business podcast, hosts Mark J Kohler and Mat Sorensen discuss the complexities and potential pitfalls of the Qualified Small Business Stock (QSBS) tax strategy. Here are some of the key points they discussed:
- An explanation of the QSBS strategy, its allure for small businesses, and the role of C Corporations in this strategy.
- The three major problems associated with the QSBS strategy - The requirement of having a qualifying business, the need to show significant profit, and issues with potential buyers.
- The significance of earnings before interest, taxes, depreciation, and amortization (EBITDA) in determining the value of a business.
- The types of businesses that qualify for the QSBS strategy, and the potential roadblocks that could hinder a QSBS.
- Real-world examples of situations where the QSBS strategy worked successfully, specifically in venture capital scenarios.