Transferring Qualified Small Business Stock to Trusts: Income, Gift, and Estate Tax Risks and Planning Strategies

Rebecca Pugliesi | Plante & Moran, PLLC

Rebecca Pugliesi, J.D., LL.M. (Tax), is a Principal in Plante Moran’s National Tax Office who advises on complex federal tax issues arising in the purchase, sale, and restructuring of family-owned and private equity–owned businesses, with a particular focus on Qualified Small Business Stock (IRC §1202) planning and transaction structuring. Her work regularly involves modeling “what-if” exit outcomes and designing structures intended to preserve and maximize tax attributes, especially where QSBS benefits intersect with ownership planning, entity choice, and timing.

For practitioners evaluating transfers of QSBS to trusts, Rebecca brings a deal-and-planning perspective grounded in how Section 1202 eligibility is maintained (and lost) over the life of an investment, including shareholder eligibility (individuals, trusts, and estates), documentation practices, and risk areas where IRS guidance is limited, making disciplined planning and defensible records critical. She is a frequent speaker on M&A tax structuring and QSBS strategy and serves as an officer of the State Bar of Michigan Tax Section Council; she is also a Michigan-licensed attorney.

John Bunge | Holland & Knight LLP

John Bunge is a tax and private wealth services attorney in Holland & Knight’s Nashville office. Mr. Bunge helps clients navigate the confluence of tax planning, business succession planning and estate planning, and seeks to find the most elegant solutions possible to reach their goals.

Mr. Bunge’s wealth preservation experience includes income, gift, estate and generation-skipping transfer tax minimization, through the use of irrevocable trusts, sales and gifts to trusts, charitable-interest trusts and grantor-retained annuity trusts, among other sophisticated wealth planning strategies. He also advises families on the formation of investment entities, such as family limited partnerships and family LLCs.

Mr. Bunge helps clients reach their charitable goals, using charitable giving techniques to minimize income, estate and gift taxes, and advising clients on the formation and operation of tax-exempt organizations, including private foundations.

He also counsels families regarding the formation, structuring and operation of family offices and private trust companies.

Additionally, Mr. Bunge helps clients minimize income taxes through individual, partnership and corporate tax planning. He also has experience assisting taxpayers through IRS audits, appeals and U.S. Tax Court litigation.

Session I – Qualified Small Business Stock Under Section 1202: Eligibility Framework and Post-OBBBA Planning | 1:00pm – 2:00pm

• Core QSBS and Internal Revenue Code Section 1202 framework
• Issuer-level eligibility requirements for a qualifying C corporation
• Shareholder-level eligibility requirements for a qualifying holder
• Recent statutory developments under the OBBBA and resulting planning implications
• Practical eligibility analysis

Break | 2:00pm – 2:10pm

Session II – Strategic Transfers of QSBS to Trusts: Preserving Exclusions, Structuring Vehicles, and Avoiding Disqualifying Traps | 2:10pm – 3:10pm

• Why transfer QSBS to trusts
• Trusts as QSBS holders: Core rules
• Trust structures for QSBS gifting
• Tax interplay beyond capital gains
• Common pitfalls and how to avoid them
• Capstone planning scenario (end-to-end)