Section 1202 Gain – Small Business Stocks
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:
- 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.
What is a capital gain distribution? Learn more about form 1099-Div Box 2A and get tax answers at H&R Block.
Many are surprised to learn that even side gigs come with a tax price. H&R Block Tax pro's have arranged expert tips for those who owe direct sales taxes.
How does the sale of business property affect your taxes? Learn about property classifications and get tax answers at H&R Block.
How does the IRS handle different types of inheritance? Learn more from the tax experts at H&R Block.