{"type":"rich","version":"1.0","provider_name":"Transistor","provider_url":"https://transistor.fm","author_name":"Wealthyist","title":"Wealthyist E35 | Understanding How OBBBA Affects QBI & QSBS (PT 2)","html":"","width":"100%","height":180,"duration":642,"description":"In this week's episode of the \"Wealthyist\" podcast, hosted by Dr. Brian Jacobsen, Chief Economist at Annex Wealth Management, with guest Brian Lamborne, Senior Wealth Strategist at Annex Private Client, discussion focused on Qualified Small Business Stock (QSBS) and comparisons to the Qualified Business Income Deduction (QBID) from their previous episode. \nHere's a summary: QSBS applies to stock in a C corporation that has spent most of its life as a C corporation. Unlike QBID, which is a deduction for pass-through entities (e.g., partnerships, S corporations), QSBS offers an exclusion of capital gains when selling the stock of a qualifying C corporation.\nKey Differences:QBID: Provides a deduction (up to 20%) on income from pass-through entities, beneficial for businesses generating ongoing cash flow.\nQSBS: Offers a capital gains exclusion (up to 100% depending on holding period) when selling C corporation stock, ideal for businesses planning a sale.\nQSBS Rules:The business must be a C corporation at issuance and for most of its life, though it can temporarily elect S corporation status.\nThe company’s gross assets cannot exceed $50 million (increased to $75 million under new rules) at the time of stock issuance.\nCertain businesses (e.g., hospitality, professional services like doctors or lawyers, or investment companies) do not qualify.\nStock must be acquired directly from the company (e.g., through capital infusion or stock options), not purchased from another shareholder.\nHolding Period Changes: The \"One Big Beautiful Bill\" modified QSBS rules, reducing the holding period for exclusions:Old rule: 5 years for 100% capital gains exclusion.\nNew rule: 4 years for 75% exclusion, 3 years for 50% exclusion, providing more flexibility.\nThe exclusion cap increased from $10 million to $15 million in gains.\nStrategic Considerations:Switching between C and S corporation status to game the system is risky and could lead to losing QSBS benefits, as the IRS enforces rules to...","thumbnail_url":"https://img.transistorcdn.com/qGrVF3x5hFIhTcfRmZqwI5cWDYeStA3lwZ1z54k8q18/rs:fill:0:0:1/w:400/h:400/q:60/mb:500000/aHR0cHM6Ly9pbWct/dXBsb2FkLXByb2R1/Y3Rpb24udHJhbnNp/c3Rvci5mbS83MWRm/YWQ1NmRjOWIwNmNm/MjExZmE3MjViNTU0/Njk5NC5qcGc.webp","thumbnail_width":300,"thumbnail_height":300}