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Craig Co. is a domestic small business C corporation which has been actively engaged in a trade or business since its incorporation. Kimberly purchased 200 shares of Code Sec. 1202 stock from Craig Co. on September 1, 2006. Kimberly wants to sell the stock (a very large gain would result from the sale) but wants to be sure the gain qualifies for the 50 percent exclusion. When should Kimberly sell the stock in order to qualify for the exclusion?

a. March 3, 2010
b. September 3, 2010
c. September 3, 2011
d. It does not matter. A sale at any time will qualify for the gain exclusion.

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