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Return to income

Small-Business Stock

Your mutual fund company might send you a Form 1099-DIV. This could show an amount in Box 2c (Section 1202 gain). If so, the mutual fund you sold qualified as small-business stock. If this applies, you might be able to exclude up to 100% of the capital gain from your income. You can do this if you held the stock for more than five years. You’re taxed on the remaining capital gain at whichever rate is lower:

  • 28%
  • Your marginal tax rate

The amount of gain you can exclude is figured by the date you got the stock:

  • 50% -- Jan. 1, 2015 and later
  • 100% -- Sept. 28, 2010, through Dec. 31, 2014
  • 75% -- Feb. 18, 2009, through Sept. 27, 2010
  • 50% -- Aug. 11, 1993, through Feb. 17, 2009

Your mutual fund company will send you a statement with the information you need to report this gain.

To learn more, see Form 8949 and Schedule D instructions at www.irs.gov.

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Calculators

So how much will you get (or owe) this year? That’s the million-dollar question. We happen to have three very useful calculators to help you estimate your refund or balance due.

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