Many, but not all, preferred shares produce qualified dividend income that is taxed at a preferential rate of up to 20% versus the ordinary-income rate of as much as 39.6%.
"In an open-IPO auction--as its name implies--any qualified investor can open an account and bid for shares, " says Gregory Hartmann , Hambrecht's general counsel.
Subject to certain requirements, investors in qualified small businesses can exclude one-half of the realized gain upon sale of their shares in the company.