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Startup

Essential accounting and finance guidance for startup founders

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14 min read

Regulation D Rule 506(b) vs Rule 506(c): How Founders Pick Between the Quiet Round and the Public Pitch in 2026

Rule 506(b) and Rule 506(c) of Regulation D both allow uncapped private placements but differ sharply on marketing and verification. 506(b) bans general solicitation and permits up to 35 sophisticated non-accredited investors on a reasonable-belief standard; 506(c) permits public solicitation but requires reasonable steps to verify every purchaser is accredited. A March 2025 SEC no-action letter lets issuers rely on $200,000+ individual or $1 million+ entity minimum checks as the primary verification step.

Mike Thrift

fundraisingcapital-raisingstartup
16 min read

Section 382 NOL Limitation After Ownership Change: How Venture-Backed Startups Preserve Net Operating Loss Carryforwards Through Equity Rounds

Section 382 caps a startup's pre-ownership-change net operating loss deductions at the pre-change fair market value multiplied by the long-term tax-exempt rate (about 3.56 percent in February 2026), triggered when 5 percent shareholders collectively gain more than 50 percentage points over a rolling three-year testing period.

Mike Thrift

taxtax-planningstartup
13 min read

The ISO AMT Trap in 2026: How Tech Employees Get Hit With Six-Figure Tax Bills on Stock They Can't Sell

Exercising and holding ISOs adds the bargain element to AMTI on Form 6251 Line 2i, which can produce a six-figure tax bill before a single share is sold. A 2026 guide to the tightened AMT exemption phase-out ($500K single / $1M MFJ at 50¢ per dollar), the qualifying disposition rules under IRC §422, and the planning moves — AMT crossover exercise, §83(b) early exercise, same-year disqualifying sale, and multi-year laddering — that keep tech employees out of the trap.

Mike Thrift

taxtax-planningequity-instruments
13 min read

ISO AMT in 2026: Bargain Element, Form 6251 Line 2i, and the OBBBA Phase-Out Cliff

Under OBBBA, the 2026 AMT exemption phases out at $500K single / $1M joint with a 50-cent rate, doubling the stealth bracket on ISO exercises. Here is exactly how the bargain element flows into Form 6251 line 2i, when a same-year disqualifying disposition eliminates the AMT adjustment, and how to plan exercises to avoid a six-figure phantom-income tax bill.

Mike Thrift

equity-instrumentstax-planningstock-basis
13 min read

Section 1244 Small Business Stock: How Founders Convert a Failed Startup Into a $50,000 Ordinary Loss

Section 1244 lets eligible founders and early investors convert up to $50,000 ($100,000 joint) of capital loss on failed C-corporation stock into ordinary loss deductible against W-2 wages, freelance income, or interest. This guide covers who qualifies, the $1 million capital ceiling, Form 4797 reporting, and the formation steps that keep the deduction defensible.

Mike Thrift

taxtax-deductionstax-planning
13 min read

Section 351 Tax-Free Incorporation: The 80% Control Test, Boot Traps, and QSBS for Founders

Section 351 lets founders incorporate without immediate tax only if the transferor group owns 80% of voting power and every non-voting class right after the exchange. Miss the control test, contribute services instead of property, or assume liabilities greater than basis, and the gain surfaces anyway. A practical playbook covering boot, the Section 357(c) trap, basis carryover under Sections 358 and 362, and how to preserve QSBS eligibility under Section 1202.

Mike Thrift

incorporationc-corptax-planning
14 min read

Form 6765 R&D Tax Credit Payroll Offset: How Qualified Small Businesses Turn $500,000 of Section 41 Credit Into Cash

Section 41 lets a qualified small business apply up to $500,000 of R&D credit per year against employer Social Security and Medicare taxes via Form 6765 and Form 8974. This guide explains the QSB tests, the four-part research test, the redesigned Section G that becomes mandatory in 2026, and how OBBBA's Section 174 reset changes the timing math.

Mike Thrift

tax-creditspayrollstartup
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