Ed Lyon & Martin Eisenstein — The “Big Beautiful Bill,” QSBS 1202, and Selling Your Business Tax-Free

The new tax law is signed, sealed, delivered — and packed with planning windows. Ed Lyon and guest Martin Eisenstein, JD, CPA unpack the headline changes and zoom in on the sleeper opportunity: expanded Qualified Small Business Stock (QSBS) under Section 1202. Translation: for the right industries and structures, owners can position for a partially or even fully tax-free exit, now on shorter holding periods and higher limits than before. They also cover bonus depreciation, Section 179, R&D, estate and charitable tweaks, how to recap into a new C-corp for future 1202 eligibility, and why certainty in the code matters for planning.

• QSBS 1202, upgraded

  • Shorter holding periods: partial exclusion at 3 and 4 years, full exclusion at 5 years

  • Higher hard-dollar limits: from 10 million to 15 million, plus the 10× basis rule retained

  • Not for every industry: generally favors product/tech and many blue-collar service businesses, not professional services, finance, hospitality, etc.

• Structure matters

  • New ventures may start as C-corps to qualify; existing pass-throughs may recapitalize and roll into a new C-corp to start the 1202 clock

  • Consider splitting lines of business to isolate saleable pieces that qualify

• More expensing and acceleration

  • 100% bonus depreciation restored

  • Section 179 expanded

  • R&D rules improved for faster deductions

• Charitable and estate tidbits

  • Above-the-line cash charitable deduction increased for non-itemizers

  • Estate/GST planning windows broadened to move more wealth down a generation

• Policy vs. planning reality

  • Certainty helps: many 2017 provisions extended, making planning assumptions safer

  • Enforcement shifting from manpower to technology/AI; prioritize documentation and defensible positions

• Not just one trick

  • 1202 can pair with CRTs, intermediated installment sales, Opportunity Funds, and entity hygiene for an exit “mosaic” instead of a single lever

00:00–02:20 — Why the bill passed fast and why that matters for planning certainty
02:20–04:40 — What changed broadly: rates, SALT, QBI continuation, tips/overtime nuances
04:40–08:10 — QSBS 1202 explained: who qualifies, shorter clocks, higher limits, 28% special gains rate and exclusions
08:10–10:30 — Recap strategies: rolling an existing business into a new C-corp to start the 1202 clock
10:30–12:30 — Blue-collar roll-ups and private equity interest; positioning for boomer exits
12:30–15:30 — Breaking the business into parts: sell the saleable, rehabilitate the rest
15:30–18:10 — Bonus depreciation, Section 179, R&D acceleration — where the cash flow shows up
18:10–21:20 — Manufacturing expensing vs. tariff uncertainty; policy noise and real-world decisions
21:20–24:30 — Estate and charitable tweaks that add up over time
24:30–31:00 — IRS enforcement drift to AI; audits, adoption credit example, and sensible risk management
31:00–36:30 — Don’t skip legit deductions out of fear; avoid defensive accounting
36:30–41:30 — Tax preparer vs. tax strategist; testing if you’ve outgrown your accountant
41:30–48:00 — Segmenting functions and IP, aligning structure to goals, building an exit mosaic
48:00–49:00 — How to reach Martin; closing

• “1202 is the closest thing to a one-weird-trick in tax — but only if you qualify and structure it right.”

• “Certainty grows the economy. Planners need rules that stick long enough to matter.”

• “Never pass on a legitimate deduction just to avoid an audit — document it and defend it.”

• “A tax preparer fills boxes. A tax strategist builds outcomes.”

• QSBS 1202 planning: start as or recap into a C-corp, track qualified assets and activities, hold for 3/4/5-year milestones, consider gifts to trusts for multiple exclusions

• Exit mosaics: combine 1202 with charitable remainder trusts, intermediated installment sales, Qualified Opportunity Funds

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