Section 1202 Updates: Understanding QSBS Tax Benefits

Qualified Small Business Stock (QSBS) under Section 1202 may allow business owners, founders and investors to exclude a significant portion of capital gains from federal taxable income when selling qualifying stock.

In this episode of Cherry Bekaert’s Tax Beat podcast, we are joined by the Firm’s National Tax Practice Leader, Michael Wronsky, Tax Directors Sarah McGregor and Barry Weins, and Transaction Tax Manager Molly Gill. Our tax professionals discuss recent Section 1202 updates, key eligibility requirements and planning opportunities for growing businesses.

Listen to learn more about:

• Core QSBS qualification requirements, including C corporation status, gross asset limits, the 80% active business test and shareholder eligibility
• Recent Section 1202 changes, including tiered holding periods and expanded gain exclusion opportunities
• Tax planning considerations for partnerships and S corporations evaluating a conversion to C corporation status
• Common QSBS pitfalls, such as stock redemptions, excess working capital, corporate investment and valuation challenges that may impact eligibility

Recent court decisions are prompting renewed discussion around how disaster relief provisions apply to Internal Revenue Service (IRS) deadlines and what actions taxpayers may take before key limitation periods expire.

The federally declared COVID-19 disaster period may have created unexpected opportunities for taxpayers to revisit penalties, interest assessments and refund claims tied to prior tax filings and payments.

In this episode, Michael Wronsky, Managing Director and Leader of Cherry Bekaert’s National Tax Practice, and Sarah McGregor, Tax Director, discuss taxpayer-favorable court rulings and the broader implications for businesses and individuals that incurred penalties or interest during the pandemic years. They explain how these cases could impact filing deadlines, refund opportunities and IRS procedures, while also addressing the uncertainty created by ongoing government appeals and evolving guidance.

Listen to learn more about:

• 01:18 – Background on recent taxpayer-favorable court cases
• 02:45 – Impact of disaster relief provisions on tax deadlines during the COVID-19 pandemic
• 05:00 – Factors that resulted in an unusually long postponement period
• 06:07 – Potential opportunities related to penalties and interest assessments
• 08:15 – Protective refund claims and abatement considerations
• 09:40 – The IRS response and pending litigation
• 12:20 – Key timing considerations and statute of limitations concerns
• 15:00 – Practical next steps for taxpayers and advisors

2025 tax law changes are reshaping depreciation, energy incentives and cash‑flow planning

In this episode of the Tax Beat Podcast, Cherry Bekaert tax professionals explore recent developments benefiting cost segregation studies, the Section 179D Energy Efficient Commercial Buildings deduction (Section 179D), and bonus depreciation. Their discussion explains how these incentives help commercial real estate owners and capital‑intensive businesses accelerate deductions by shifting depreciation into earlier tax years — improving cash flow and supporting expansion, renovation and new construction projects.

Key Topics Discussed

• Cost segregation fundamentals and accelerated depreciation
• Permanent 100% bonus depreciation and planning considerations
• QPP for manufacturers
• Section 179D basics and eligibility
• Section 179D opportunities for designers and tax‑exempt buildings
• Retroactive planning opportunities
• Construction timing and upcoming Section 179D deadlines
• Coordinating multiple tax incentives for maximum benefit

The panel covers how the return of permanent, 100% bonus depreciation has renewed interest in cost segregation studies, and how manufacturers may benefit from the newly enhanced Qualified Production Property (QPP) rules. The conversation ends with an emphasis on the value of a coordinated, full‑service approach to identifying and stacking multiple tax incentives while managing compliance and risk.

Listen now to learn how cost segregation and Section 179D can work together to accelerate deductions, improve cash flow and help businesses adapt their tax strategies amid evolving legislation.