Neil here.

Taxes may be a pretty Grinchy subject for the holiday season… but for angel investors, tax season can actually bring around some sweet deals.

In fact, one of my favorite perks of being an angel investor is the tax breaks and benefits that you could be entitled to just for investing in startup companies.

Last month, we talked a bit about one of them: the Capital Gains Exemption. You can catch up on that here.

Today, I want to dive into another important benefit.

It’s called the Rollover Perk (IRC § 1045), and it could help you save a bunch of money as you build up your angel investing portfolio.

And with tax season racing around the corner very soon, it’s better to be prepared now than leave it all to the last minute.

Let’s dive in…

What Is the Rollover Perk?

In short, the Rollover Perk allows angel investors to move money from one investment into another without having to pay taxes on gains they made on the first company.

This is a big deal.

If you remember from last time, the Capital Gains Exemption kicks in after five years… but the Rollover Perk kicks in after only six months. So, if you’re lucky enough to make a quick exit on a startup company, you have the option of reinvesting that money rather than paying taxes on your profit (the end value of your stock minus the original amount invested).

You have 60 days to reinvest your profit into another small business venture before you have to pay taxes.

And here’s something even better…

If you roll an investment over into a new startup, the government considers it to be the same investment. That means your Section 1202 Capital Gain Exemption eligibility won’t restart… and you’ll be even closer to qualifying for it.

This is just one of a few ways you can minimize your losses as an angel investor and hold on to those well-deserved profits.

For more information on hacking your taxes as an angel investor, check out my full report here. And as always, drop a comment below with any questions you want me to cover in the future. I’m here to help!

That’s all from me for now, but I’ll be back soon with another update.

Until next time,

Neil Patel