Healthcare Products Manufacturer Was “Qualified Small Business”

Gain on the sale of stock in a qualified small business held more than 5 years if tax free (partially tax free for shares acquired before September 28, 2010). But stock in C corporations involved in performing services in certain industries, including healthcare, aren’t qualified. The IRS said that a manufacturer providing products to the healthcare industry was qualified; it was not a service provider even though it was associated with that industry. The shareholder’s gain was (partially) excludable.  #IdeaoftheDay