
On Friday, October 14, 2016, the Nebraska Supreme Court ruled in Stewart v. Nebraska Dept. of Revenue that the Nebraska Special Capital Gain Election does not require a business purpose or economic substance for transaction entered into for the purpose of creating a qualified corporation. This ruling creates tax savings opportunities for Nebraska resident individuals who are contemplating selling stock of closely held businesses.
Overview
The Nebraska Special Capital Gain/Extraordinary Dividend Election allows resident taxpayers to make one election during his or her lifetime to exclude from federal adjusted gross income the extraordinary dividends paid on and the capital gain from the sale or exchange of capital stock of a corporation acquired by the individual (a) on account of employment by such corporation or (b) while employed by such corporation. A qualified corporation is one that, at the time of the first sale or exchange of capital stock or declaration of extraordinary dividend on capital stock for which the election is made:- Has been in existence and actively doing business in Nebraska for at least 3 years;
- Has at least five shareholders; and
- Has no more than 90% of the capital stock held by any single shareholder or group of related shareholders.
Recent News & Insights
Tech
Microsoft 365 Series: How to Master Outlook for Maximum Productivity
Most people have a complicated relationship with their inbox. Some days, your calendar barely ...
M&A
Is an employee stock ownership plan (ESOP) right for your business?
One of the biggest reasons business owners struggle with exiting their business is getting a ...
Accounting
How to Strengthen Your Accounts Payable Process Against Fraud
Why are small businesses vulnerable? Small businesses face unique challenges that make them ...
Family Office
How Family Offices Can Leverage Outsourced IT to Protect & Scale Wealth
As family offices grow in complexity, so do the demands placed on their technology. Managing ...


Let’s get you where you want to go.
We work to simplify complexities, help make critical business decisions, and confidently focus on the things that are truly important to you. We embrace your business as our own to spark the right solutions and help you thrive.