### Question
How is the "qualified small business stock" defined?


### Answer
The term **qualified small business stock** is defined in *26 U.S.C. § 1202* as follows -

> any stock in a C corporation which is originally issued after the date of the enactment of the Revenue Reconciliation Act of 1993, if—


(A) as of the date of issuance, such corporation is a qualified small business, and


(B) except as provided in subsections (f) and (h), such stock is acquired by the taxpayer at its original issue (directly or through an underwriter)—


(i) in exchange for money or other property (not including stock), or


(ii) as compensation for services provided to such corporation (other than services performed as an underwriter of such stock)

#### Citation:
  - *26 U.S.C. § 1202*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART I-TREATMENT OF CAPITAL GAINS**

