Submitted By: someone
Answered: September 11, 2017 11:51 pm

I’ve owned stock in a privately-held corporation for six years and sold it this year. What is my capital gain rate?

In general the basic capital gain rate applies (see the previous question). However, if the stock is qualified small business stock (also referred to as Section 1202 stock) and you acquired the shares directly from the corporation for cash, property, and/or services after September 27, 2010, there’s zero capital gains tax; all of the gain is excludable from gross income. Only certain types of C corporations can issue Section 1202 stock, so check with your tax advisor.

Tax Glossary

Depreciation recapture

An amount of gain on the sale of certain depreciable property that is treated as ordinary income in the case of personal property. Recapture is computed on Form 4797.

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