How do I know if an exit qualifies for Section 1202 (QSBS gains rate) or Section 1045 (Rollover) tax treatment on gains?

The QSBS status for an investment's return is disclosed on your K-1 for the year in which the investment had QSBS-qualifying taxable gain.

Because Section 1045 requires reinvestment within 60 days of the underlying exit in order to utilize the tax benefit, we generally include 1045 eligibility in connection with the distribution announcement for an exit.  

Section 1045 and Section 1202 QSBS assertions typically require that the portfolio company provide confirmations regarding qualifying criteria. Our disclosures will rely on information received from the companies. If we are not able to obtain sufficient confirmations to establish qualification for Section 1045 and 1202, the exits may not be reported as 1202 or 1045 eligible exits.

 

AngelList and its affiliates are not tax advisors and do not provide tax advice. All decisions regarding the tax implications of your investments should be made in consultation with your independent tax advisor.

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