QSBS Is the Hottest Tax Break in America: Qualifying Clients Before They Sell

Matthew E. Rappaport, Vice Managing Partner | Falcon Rappaport & Berkman LLP

Matthew E. Rappaport is Vice Managing Partner of Falcon Rappaport & Berkman LLP and chairs the firm’s Taxation and Private Client Groups. His practice concentrates on taxation as it relates to real estate, closely held businesses, private equity funds, family offices, and trusts and estates, advising on tax planning, structuring, and compliance for commercial real estate projects, all stages of the business life cycle, generational wealth transfer, family business succession, and executive compensation.

• Education & Credentials

Mr. Rappaport received both his Master of Laws in Taxation and his Juris Doctor from Georgetown University Law Center. He is admitted in the State of New York, the United States Tax Court, the United States District Courts for the Southern and Eastern Districts of New York, the United States Court of Appeals for the Second Circuit, and the Supreme Court of the United States.

• Recognition & Leadership

Mr. Rappaport was selected to the New York Metro Super Lawyers Rising Stars list from 2017 through 2025 and received the NBI 2025 Outstanding Faculty Award. At the firm, he leads two practice groups as Chair of Taxation and Chair of Private Client.

• Professional Involvement

Mr. Rappaport serves on the Sales, Exchanges & Basis Committee of the American Bar Association Section on Taxation, is a member of the New York State Bar Association, and is a past Vice Chair of the Taxation Committee of the Nassau County Bar Association. His articles have appeared in the Journal of Taxation of Investments, The Tax Adviser, ABA Tax Times, and Bloomberg BNA’s Tax Management Real Estate Journal, and he is a frequent CLE presenter, including prior programs for myLawCLE.

• Experience

Mr. Rappaport is known for complex transactions involving advanced tax considerations, including Section 1031 exchanges, the Qualified Opportunity Zone program, freeze partnerships, private equity mergers and acquisitions, and Qualified Small Business Stock. He has served as a trusted advisor to prominent real estate funds, executives of multinational corporations, venture capitalists, startup businesses, and ultra-high net worth families, and collaborates with attorneys, accountants, financial advisors, bankers, and insurance professionals on matters requiring tax-focused analysis.

Matthew E. Foreman, Partner | Falcon Rappaport & Berkman LLP

Matthew E. Foreman is a Partner at Falcon Rappaport & Berkman LLP, where he co-chairs the firm’s Taxation Practice Group. He advises on Qualified Small Business Stock (QSBS), entity selection, and the tax-efficient return of capital to owners, and structures taxable and tax-free combinations, mergers, sales, acquisitions, and divisive reorganizations, including cross-border transactions.

• Education & Credentials

Mr. Foreman earned a Master of Laws in Taxation from New York University School of Law, a Juris Doctor from Penn State Dickinson School of Law, and a Bachelor of Science in Business Administration, with a concentration in Finance, cum laude, from the State University of New York at Albany. He is admitted to practice in the State of New York, the State of New Jersey, and the United States Tax Court.

• Recognition & Leadership

Mr. Foreman has been selected to the New York Metro Super Lawyers list from 2020 through 2025 and was named to the New York Metro Super Lawyers Rising Stars list in 2018 and 2019.

• Professional Involvement

Mr. Foreman hosts the firm’s podcast, How Tax Works, and his writing addresses Qualified Small Business Stock, entity selection, reorganizations, partnerships, and the taxation of cryptocurrency. He sits on the Emerging Companies and Venture Capital Committee of the New York City Bar Association, where he has been a member since 2013 and served as Secretary of the State and Local Tax Committee from 2020 through 2025. He is also a member of the Tax Section of the New York State Bar Association and serves as a board member and helpline volunteer for Savvy Ladies, Inc.

• Experience

Mr. Foreman renders tax memoranda and formal tax opinions on subjects including tax-free corporate and partnership reorganizations, and drafts equity and asset purchase agreements, LLC and partnership operating agreements for joint ventures, equity rollover agreements, and tax sharing or receivable agreements. He designs profits interests to incentivize employees, structures tax-efficient expansion abroad for domestic businesses, and advises on spin-offs under I.R.C. § 355 and cross-border acquisitive reorganizations. He also represents taxpayers in income and sales tax audits, state residency disputes, and matters involving the passive activity and at-risk loss limitation rules under I.R.C. §§ 469 and 465. Mr. Foreman began his career at Big 4 accounting firms, advising Fortune 500 companies on a variety of tax matters.

SESSION 1 – Qualifying the Company: Section 1202 Eligibility and Entity Structuring After OBBBA | 12:00pm – 1:00pm

This session walks attorneys through the full Section 1202 eligibility framework, as amended by OBBBA, covering the three structural changes to the exclusion cap, holding period tiers, and aggregate gross assets threshold, alongside the five core requirements that remain unchanged. Attorneys learn how to evaluate whether a client’s company qualifies, how to structure or convert entities to access QSBS treatment, and how to avoid the pitfalls identified in recent Tax Court and Court of Federal Claims decisions. They leave equipped to audit existing holdings, counsel on conversion mechanics, and spot the 31.8% rate trap that can make partial exclusions more costly than expected.

BREAK | 1:00pm – 1:10pm

SESSION 2 – Multiplying and Preserving the Exclusion: Gifts, Trusts, and State Tax Planning Before Exit | 1:10pm – 2:10pm

This session teaches attorneys how to multiply the Section 1202 exclusion across multiple taxpayers through gifting and non-grantor trust structures, and how to navigate state non-conformity before a client’s exit. It covers the mechanics of exclusion stacking under both pre- and post-OBBBA caps, the assignment-of-income timing rules that can undo a transfer at the worst moment, and the state-level strategies, including trust situs selection and relocation, that determine whether the exclusion survives at the state level. Attorneys leave with a working framework for structuring gifts and trusts before any sale process begins and for identifying which clients face material state tax exposure despite a clean federal exclusion.