Question

For purposes of exclusion under section 1202, which of these is a qualified trade or business?

Bank

CPA firm

Manufacturing company

Motel

Answer 1

Hello Sir/ Mam

THE CORRECT ANSWER IS OPTION C : MANUFACTURING COMPANY

Section 1202 of IRC provides exclusion for gainin certain SBSS by taxpayers other than corporations.

For exclusions, qualifies trade or business means any trade or business other than :

Trade/ Business involved in services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, banking, insurance and/or any business of operating a hotel, motel, restaurant, or similar business

WHICH ELIMINATES Bank, CPA Firm and Motel.

I hope this solves your doubt.

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