Title: I'm about to sell my company.  Because the company has existed for less than 1 year, I'm subject to short-term capital gains tax - about 35%.<p>The tax code stipulates that, if I invest the proceeds in a "qualifying small business" and leave it there for just a few more months, the proceeds of the original and the new investment are treated as long term capital gains - 20%.<p>Even better: if the proceeds stay in a QSB for more than 5 years, the whole thing is tax free, due to this:
http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2010/CorpTax/TaxExclusion_Expanded.jsp<p>I'm fairly certain that there's a win/win/win here: a way I can use my proceeds to invest in a small business, create jobs (the goal of the tax break), make the economy better, but not take on the kind of risk that comes with a traditional tech startup angel investment.  I've thought about buying a diversified portfolio of franchised businesses, for example, or creating a holding company that makes many small investments.<p>But I'm not a financial genius, there's always gotchas, and I don't want to re-invent the wheel.  I've talked to two startup lawyers, a financial planner, and two CPAs, and while they can explain the mechanics, none of them have good suggestions about implementation.<p>Does anyone know of solid strategies for sheltering investment proceeds in a QSB without taking too much capital risk?  This information would be really helpful to anyone here who successfully sells their company!
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