Lacerte calculation of qualified small business stock capital gain is wrong

Forum|Forum|3 years ago
October 31, 2022
1 reply
5 views

Our client made 21 million selling his company and qualified for QSBS exclusion. Lacerte calculated that taxpayer eligible for 10 million exclusion when it should be 5 million (stock acquired in 2006, 50% exclusion).

How can we let Lacerte know this issue and have them fix it? We were almost mislead by this huge error, thank god we had quality review.

Lacerte Tax

This topic has been closed for replies.

George4Tacks

Level 15

It appears Lacerte acknowledges it doesn't do everything. Here is what you get if you press F1 at the input for Section 1202 Exclusion

QSB Stock: Section 1202 Exclusion [O]

Schedule D

Screen 17; Code 139

The program calculates the section 1202 50% exclusion when you make an entry in "1 If Qualified Small Business Stock." The program limits the gain that qualifies for the exclusion to the greater of $10,000,000 ($5,000,000 if MFS) or 10 times the basis. Other limitations may apply depending on whether the taxpayer previously disposed of stock of the same corporation under these rules in prior years or if there were basis adjustments after the stock was originally issued. Refer to IRS Code Section 1202. If one of these, or other, limitations apply, use this field to enter the appropriate amount.

Answers are easy. Questions are hard!

QSB Stock: Section 1202 Exclusion [O]

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