Advice for Early Uber Shareholders



Disclaimer

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. 

  1. 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.
  2. 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).
  3. 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).
Just thinking . . .

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