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Under section 1202 of the tax code, individuals investing in Qualified Small Business Stock (“QSBS”) can exclude a significant portion of associated capital gains when selling or exchanging that stock depending on when it was acquired. In fact, for QSBS acquired after September 27, 2010, and held over five years, gains may be completely tax-free up to the cap. The cap is the greater of ten times the adjusted cost basis or $10 million. However, numerous criteria must be satisfied. The investor must be an individual, not another corporation. The individual must have acquired the stock from the corporation in an original issuance, not from an existing shareholder. The business must be an active C corporation having aggregate gross assets which do not exceed $50 million immediately after the issuance of the stock. Also, certain industries are excluded, such as those relating to law, health, engineering, accounting, consulting, banking, financing, investing, leasing, farming, mining, and operating a motel or restaurant. The types of industries that generally qualify include technology, wholesale or retail, and manufacturing.