Magic numbers do exist: 1202 is a magic number for those involved in start-ups and similar business activities that involve the sale of highly appreciated stock. It can magically erase millions in taxes for certain people.
Internal Revenue Code (IRC) Section 1202 provides an income tax exemption in an amount equal to the greater of $10 million or 10 times the adjusted basis of qualifying stock. The exempt amount is determined per taxpayer holding the stock sold.
