144 THE DISTRIBUTOR’S LINK ROMAN BASI SECTION 1202 STOCK: HOW TO EXCLUDE UP TO $10 MILLION ON THE SALE OF YOUR BUSINESS! – PART 2 from page 70 [6] The issuing corporation does not significantly redeem its stock within a two-year period beginning one year before the issue date. A significant stock redemption is redeeming an aggregate value of stocks that exceed 5% of the total value of the company’s stock. If your business satisfies these requirements, then congratulations! When you sell your company, you should be able to exclude (almost all) of your federal capital gains tax. State taxes that conform to federal tax will also exclude capital gains of small business stock. Since not all states correlate with federal tax directives, taxpayers should seek guidance on how their states treat realized profits from the sale of qualified small business stocks. Let’s walk through an example whereby a business owner decides to close up shop and sell their business. The business owner is single and has $410,000 in ordinary taxable income, therefore placing them in the highest tax bracket. They sell qualified small business stock acquired on September 30, 2010 and have a realized profit of $50,000. The taxpayer may exclude 100% of their capital gains, meaning the federal tax due on the gains is $0. The exclusion could possibly be even greater if the applicable state laws recognize Section 1202! Now, let’s change the facts a little bit. Suppose the taxpayer purchased the stock on February 10, 2009, and after five years sells it for a $50,000 profit. The Federal tax due on capital gains would be 28% x (50% x 50,000) = $7,000. This example really illustrates the importance of timing with regards to when the stock was acquired. Only stock acquired on or after September 27, 2010 is eligible for exclusion of up to $10 million. Business owners should immediately check with their legal counsel, accountant, or business broker regarding the structure of their business, ESPECIALLY if they plan on selling their business within the next few years. Failure to do so could potentially leave millions on the table! ROMAN BASI ANTHONY DI MAIO WHAT JUSTIFIES THE USE OF BLIND RIVETS? from page 74 Pressure And Leak Resitant Jointing Blind rivets expand when set filling and plugging the hole it is in from incursion by water, fumes etc. With sealant applied to the barrel side of the flange, that when set on roofs of police cars, water will not leak into the vehicle. Vibration Resistance Set blind rivets do not loosen, shake out or back off as screws and bolts do. As blind rivets, when set fill the hole completely and tightly, there is no possibility of slide, slippage cannot exist. Locking devices, thread adhesives and lock washers are unnecessary Overcoming Mismatching Blind rivets can be selected to overcome poor hole alignment and oversized holes. Since blind rivets hold by expansion inside the hole, irregularities can be compensated for during installation.Not all blind rivets are capable of filling oversized holes. The strong pull up characteristic of the blind rivet allows even separated parts to be pulled together and joined. Foolproof Installation While nuts could be forgotten at assembly, screws not torqued and adhesives not set correctly, blind rivets can only be set or not set. Once the setting tool cycle is run the blind rivet is set and the mandrel is broken off automatically producing a positive visually inspectable joint. The operator of the setting tool is easily taught and requires no adjustment or tinkering. Variety Blind rivets being standard for many years, are available in many styles, types and sizes at low cost and without lengthy delays for set-up and tooling. Special modifications for unique features such as shoulders to attached components. Material range from steel, stainless steel, aluminum to even plastic. Styles include large diameter heads for load distribution, countersunk heads and even of set stand-off heads for molding attachments. Colored blind rivets to match styling needs. ANTHONY Di MAIO
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