Advice for Early Uber Shareholders
If you are lucky enough to be an early Uber Shareholder with more than $10 million of gain, there are still some tax planning opportunities for you.
The Qualified Small Business Stock tax benefit has at least two anomalies worth keeping in mind.
- You are entitled to the greater of $10 mm or 10x the cost of the stock sold during the year -- so ordinarily, you want to sell low basis stock first and higher basis stock in a subsequent year because that will maximize the total amount of shelter.
- However, the Uber Series Seed preferred was issued before September 27, 2010, so it is only entitled to a 75% exclusion of the gain (but the eligible gain is still limited to $10 million). So if you own stock bought before that date and stock bought after that date, you want to sell the later purchased shares earlier (and in a different tax year ideally).
- Finally, QSBS status travels with gifted stock. So if you plan to give your mother some benefit from your good fortune, you can give shares and increase your $10 million limit (she'll get her own $10 million limit).
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