2026 Digital Lunch and Learn: Section 1202 Benefits for Independent Sponsors

Description

Section 1202 benefits offer a 100% exclusion from federal income tax on gains from the sale of Qualified Small Business Stock (QSBS) – but only if certain eligibility requirements are met. This can be attractive to sponsors as it aligns with an acquire and grow strategy. However, there are certain situations where it makes more – and less -sense to pursue. Our panel of experienced experts will discuss how the exclusion works, when it makes sense, how follow-on equity investments for buy and builds/roll ups are treated under 1202, how sponsors can structure their deal fee to avoid upfront tax and also take advantage of the 1202,  and the most frequent structuring errors that cost sponsors the benefit and a practical pre/post-close checklist for deals where 1202 is in play.

Panelists

Moderator: Rob Kissling - Source Capital

Nichol Chiarella - Citrin Cooperman

Chad Scripps - Black Lake Capital

Cameron Reilly - Dara Knot Capital