Empowerment Zone Business Stock

You can generally exclude up to 60% of your gain from the sale or exchange of QSB stock held for more than 5 years if you meet the following additional requirements.

The stock you sold or exchanged was stock in a corporation that qualified as an empowerment zone business during substantially all of the time you held the stock.

You acquired the stock after December 21, 2000, and before February 18, 2009.

The gain from the sale or exchange of the stock is attributable to periods on or before December 31, 2018.

Requirement 1 will still be met if the corporation ceased to qualify after the 5-year period that began on the date you acquired the stock. However, the gain that qualifies for the 60% exclusion can’t be more than the gain you would have had if you had sold the stock on the date the corporation ceased to qualify.

Stock acquired after February 17, 2009.

You can exclude up to 75% of your gain if you acquired the stock after February 17, 2009, and before September 28, 2010.

You can exclude up to 100% of your gain if you acquired the stock after September 27, 2010.

More information.

For more information about empowerment zone businesses, see section 1397C.