The Small Business Jobs Act of 2010 (HR 5297) was signed into law on Sep. 27, 2010. Among many other provisions, this one really stood out to me. It basically says that stock purchased from a small company (less than $50M in assets) by the end of this year is exempted from capital gains with a five year holding period.

That’s up to $10M in gains or 10x the original purchase price. It’s a tremendous tax benefits for private investors.

http://tax.cchgroup.com/legislation/Small-Business-Jobs-Act-7-23-10.pdf

100% Exclusion of Small Business Capital Gains

Generally, non-corporate taxpayers may exclude 50 percent of the gain from the sale of certain small business stock acquired at original issue and held for more than five years. For stock acquired after February 17, 2009 and before January 1, 2012, the exclusion is increased to 75 percent. At the time of sale, however, 28% of the excluded gain will be treated as a tax preference item subject to the alternative minimum tax (AMT).

Qualifying small business stock is from a C corporation whose gross assets do not exceed $50 million (including the proceeds received from the issuance of the stock) and who meets a specific active business requirement. The amount of gain eligible for the exclusion is limited to the greater of ten times the taxpayer’s basis in the stock or $10 million of gain from stock in that corporation.

This bill would temporarily increase further the amount of the exclusion to 100 percent of the gain from the sale of qualifying small business stock that is acquired after the date of enactment in 2010 and held for more than five years. Additionally, the bill would eliminate the AMT preference item attributable for that sale. This provision is estimated to cost $517 million over ten years.

[UPDATED: Feb. 1, 2011]

Administration Will Propose Permanent Elimination of the Capital Gains Tax on Certain Small Business Stock

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides a 100-percent exclusion from tax for capital gains realized on the sale of certain small business stock held for more than five years.

The amount of gain eligible for the exclusion is limited to the greater of $10 million or ten times the taxpayer’s basis in the stock. This provision applies to qualified small business stock issued after December 31, 2010, and before January 1, 2012.

The Administration’s FY12 budget proposal would make this provision permanent, increasing private sector investment in small businesses. See http://www.whitehouse.gov/startup-america-fact-sheet for additional information.

We were one of only 40 companies chosen from several hundred applicants. The event is attended by hundreds of accredited investors, local angel and early-stage VC companies and will certainly accelerate things for the next round of funding.

Learn more about this year’s event being held in downtown Denver at the Daniel’s Business College. Join us for the 4th annual Angel Capital Summit on December 6-7, in beautiful Denver, Colorado!

Come see the best in entrepreneurship, at the conference that has become the best forum between San Francisco and New York for investors and entrepreneurs to find each other.

List of presenting companies

http://angelcapitalsummit.org/content/presenting-companies

Register to attend the event

http://angelcapitalsummit.org/register

Few people know that Individual Retirement Accounts (IRA) can include a wide range of investment options. It’s a common misconception among Americans that the only IRA investments allowed in a retirement account are stocks, CDs, and mutual funds. A self directed individual retirement account (SDIRA) is one in which the owner can directly invest the funds wherever he or she wishes. This provides great flexibility for making high-performance investments using tax deferred funds including real estate, private lending, tax liens and private equity deals.

Always available, but little known

Alternative investments have always been available, but little discussed by personal finance experts. The Entrust Group website states “The truth is that broader IRA investment options have been available to the public since 1975, the year contributions could first be made to IRAs.”

How to create a Self-Directed IRA (SDIRA)

Here’s some additional information on the benefits and how to get started:
How to Create a Self Directed IRA (SDIRA) For Permanent Wealth

Self-Directed IRA investment options

http://www.theentrustgroup.com/investment_options/

Prohibited Holdings in a Self Directed IRA

In addition, you may NOT purchase any of the following in a self-directed IRA:

• Collectibles (includinng works of art, rugs, antiques)
• Metals other than gold, silver and palladium bullion
• Gems
• Stamps
• Coins (except certain U.S.-minted coins)
• Alcoholic beverages, and other tangible personal property as may be defined by the Secretary of the Treasury is prohibited

However, your individual retirement account may invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion.

Additional Resources

Companies like The Entrust Group, uDirect IRA and Equity Trust specializing in helping individuals file the necessary paperwork to create a SDIRA and start investing. If you start exploring this, ask about establishing a checkbook SDIRA instead of using a 3rd party rustee. It makes things much easier without any drawbacks that I’ve seen or heard about.

For over 30 years, Gary has been involved in almost every aspect of starting, building, growing and selling businesses. Following ten excruciating years of corporate law practice in his own law firm, Gary became President of Connecting Point of America on the day of its Chapter 11 filing. Over the next four years, the company bootstrapped its revenues from $0 to over $250M, exited Chapter 11, paid off all creditors and was eventually sold for over $50M.

Gary later became President of Northgate Computers, a small start-up hardware manufacturer. During the next three years, Northgate grew to over $200M in revenues, went from 11 employees to 968, was listed as # 57 and #11 on the Inc. 500, went public, and was eventually sold.

Gary is also the former President of CTEK, a 501c3 non-profit organization assisting innovative entrepreneurs to create profitable and sustainable businesses through access to early and seed stage capital, a network of venture centers and experienced business advisors, and assisting in the commercialization of innovative technologies.

We’re excited to hear Gary’s ideas for growing the company.

Over the past three decades, Michael Bissonnette founded, funded and built four multi-million dollar corporations from the ground up and took two of them public on NASDAQ. He used Private Placements and Direct Public Offerings to raise over $50 million for those companies in 21 successful rounds of funding and rewarded early investors with extraordinary returns up to 1,300%.

• Founder & CEO of AeroGrow International, Inc. which raised $25M in private capital. The company developed and marketed consumer tabletop “mini gardens” for indoor gardening. Michael grew sales from zero to $87M in three years and took the company public in 2007. (NASDAQ: AERO)
• Founder & CEO of Voice Powered Technology International, Inc. which raised several million dollars in private capital. The company developed the world’s first hand-held voice recognition VCR remote years before other similar products became widely available. Grew sales from zero to $24M in 18 months before going public in 1993. (NASDAQ: VPTI)
• Founder & CEO of Knight Protective Industries. The company’s revolutionary technology provided wireless in-home security to consumers – much like networked fire and law enforcement notification systems today – 20 years before such systems were affordable and widespread. Sold the company in 1989 after doubling sales for four consecutive years.

More information is available on Michael’s website:
www.michaelbissonnette.com

Optical Distributor Group (ODG) is one of the largest authorized distributors of soft contact lenses in the nation. After taking the position of VP Sales & Marketing in 2005, James increased annual revenues from $70M to $230M in 2009. He currently manages a fifty person inside sales team and four national sales reps.

Prior to joining ODG, James was VP of Sales & Marketing for a regional wholesale buying club and provided hands-on direct sales training to several other franchisees.

In 1994, James co-founded ChronoLogic Corporation with Chris Sciora and Michael Schop. The company provided logistics, fleet management and routing solutions to the industrial laundry market. As VP Sales & Marketing, he built an outbound call center, brought in several high-profile enterprise clients and established ChronoLogic as the market leader in that space.

We welcome James to the MobileIQ team.

This post is password protected. To view it please enter your password below:

Password:

This post is password protected. To view it please enter your password below:

Password:

Tony held a series of corporate positions at Mercury Marine and then Brunswick Corporation. As Director of Strategic Planning at Brunswick Corporation, Tony Romersa was instrumental in the company’s $750M acquisition of boating industry powerhouses Bayliner and Sea Ray over just four months. He subsequently orchestrated an additional $250M in acquisitions of several other small boating companies. Brunswick Corporation is a multi-billion dollar public company that now has the largest pleasure boating sales division in the world.

Tony left Brunswick Corporation to accept the position of COO for Fountain Powerboats in 2002. Although the company was well known for its high-performance speedboats, its single product lines limited expansion possibilities and sales were slowing. He expanded the company’s focus to include fishing boats and cruisers which quickly added an additional $48M in annual sales. Tony continued to serve on the company’s Board of Directors after taking early retirement in 2007.

We welcome Tony to MobileIQ and look forward to working with him.