The small-business bill signed into law by President Barack Obama Monday eliminates capital-gains tax for investors who put money into qualifying startups.
The change will likely benefit angel investors, high-net-worth individuals who back technology startups, but it’s unclear whether the tax break will actually spur more individuals to put money into more companies.
For investors that put their money into companies valued at less than $50 million, and keep it there for at least five years, capital gains taxes were already at just 7 percent before the law – down from 14 percent, since the federal stimulus act passed in 2008.
Read more: Small biz bill’s startup impact questioned - Boston Business Journal
The change will likely benefit angel investors, high-net-worth individuals who back technology startups, but it’s unclear whether the tax break will actually spur more individuals to put money into more companies.
For investors that put their money into companies valued at less than $50 million, and keep it there for at least five years, capital gains taxes were already at just 7 percent before the law – down from 14 percent, since the federal stimulus act passed in 2008.
Read more: Small biz bill’s startup impact questioned - Boston Business Journal
“Getting involved in startups is a little like betting on the lottery,” he said. “If someone said they just changed the tax rate on the lottery by seven percent, do you think people would run out and buy more lottery tickets?”
Amen my sister. Well said.
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