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December 13, 2011 08:24 pm GMT

Attention, Angel Investors: You Have Until Jan. 1 To Lock In 100% Tax-Free Capital Gains On Startup Stock

tax freeAngel investing has been on the rise over the past few years (see Crunchbase chart below), and this year is no exception. A quirk in the tax laws is helping. Any "qualified small business stock" purchased between September 27, 2010 and January 1, 2012 and held for at least five years is 100 percent exempt from capital gains. After January 1, the tax exemption reverts to the normal 50 percent. So individual angel investors have a huge incentive to invest in startups before January 1 (if they plan on holding onto the stock for at least 5 years). If you are a startup raising an angel round and your investors are rushing you to get it done before the end of the year, now you know why.

Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/OpM1WC5KcD8/

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