To quickly run through these in order: 1) The program was extended. And regardless, the original company investment was made during the holiday, so as long as I roll over within 60 days, I'm OK. 2) I did hire a tax lawyer, which is why I understand the circumstances pretty thoroughly. What they weren't able to do was recommend a specific course of action based upon firsthand experience, which is why I'm asking here - either for someone who has that experience, or a pointer to a lawyer who's specifically experienced with this particular cranny of law - It's not feasible to delay without wrecking the deal - A stock transaction is not an option for the acquirer - We're a C corp - I asked a CPA as well since what I'm looking for is experiences and strategies. I concur with the gist of this advice and will have a tax attorney look over it if I come up with anything.

Thanks for taking the time to weight in.

Whoops. You're right about the second extension. The law itself (Sec 1202) was not extended, but other code sections that interplay with 1202 extended (and expanded) the scope of 1202.

That's what I get for commenting after midnight...

Good suggestion. I've had two well-regarded startup attorneys look at the situation, and the acquirer has had their counsel look at this as well (we're not their only acquisition in this set of circumstances). There's no solution that does not trigger other issues.

Besides, my goal isn't to avoid the taxes, period; it's to put the money in to something that the government and I both agree is a worthwhile alternative: creating economic value through continued investment. I'm just looking for a way to do so with modest risk and return, instead of the very high risk and return of a typical startup investment.

I think I explained the answer to your question in the original post. The government has decided that in this case the money would be better spent creating jobs than going in to general funds. I agree. I'm looking for a mechanism for doing that which accomplishes the stated goal with less risk than a traditional startup. Win (for me), win (for the government), win (for society).

:) Yeah. I don't want to move the proceeds to an offshore tax haven or something. If I can follow the letter and spirit of the law to create jobs instead of paying taxes, I think everyone wins. And the more HN readers who know about this and can do the same, the better!

As I mentioned, I've asked two attorneys (one tax lawyer, one general counsel), a couple of CPAs, and a financial advisor or two for good measure. They all could explain the mechanics but none of them had much to suggest beyond traditional startup angel investments (which I'm going to do with some of the proceeds - but I need something lower risk for the rest).

Where are you located? If you are in sv, there are quite a few folks who deal with this kinda stuff on a daily basis. I would definitely take help from them. Even if the acq is small amount, most of them do help you verbally on a good faith basis for repeated business from you.

Have you received the LOI yet? http://en.wikipedia.org/wiki/Letter_of_intent Good luck.

If you have specific names of advisors who have dealt with this particular problem, please share them!

The usual suspects (highly regarded startup attorneys, startup CPAs) have been helpful in analyzing the situation but I haven't found any who has experience with the problem at hand, and I'd rather not be a pioneer here.

Yes, we've signed an LOI; the transaction is imminent.

I realize this won't be too helpful, but I just feel you are asking the wrong people. If you can't get an accountant to suggest a proper course of actions.