QSBS exclusion calculator.
Model the IRC § 1202 federal tax exclusion on qualified small business stock at exit. Includes the greater-of-$10M-or-10×-basis per-issuer cap, the 5-year holding-period check, and the federal tax savings vs. a non-QSBS sale.
- Holding-period status (5-year rule)
- Per-issuer cap: max($10M, 10× basis)
- Excludable vs. taxable gain split
- Federal tax savings projection
Federal-only model. State treatment of QSBS varies, California and Pennsylvania notably do not conform; New Jersey partially conforms; most other states follow federal.
Enter the acquisition and sale dates.
| Scenario | Tax | Effective rate |
|---|---|---|
| With QSBS exclusion | ||
| Without QSBS (LTCG only) |
We’ll send a one-pager with your inputs, the exclusion math, the per-issuer cap, and the federal tax savings, useful for sharing with your CPA before signing a purchase agreement.
The most generous federal tax break founders get.
QSBS lets a founder exclude up to 100% of the gain on the sale of qualifying stock from federal tax. The qualifying conditions are narrow but the upside is enormous, tens of millions of tax-free gain on a successful exit.
Domestic C corporation with $50M or less in aggregate gross assets at issuance. Active business, not service/financial/hospitality.
You acquired the stock directly from the corporation (not from another stockholder), for money, property, or services.
You must hold the stock more than 5 years before sale. Stock acquired at original issue starts the clock at issuance.
The exclusion is capped at the greater of $10M per issuer or 10× your adjusted basis. Gain above the cap is taxed at LTCG rates.
QSBS sits at the intersection of tax and corporate records.
Keep the evidence with the record.
Octelligence doesn't prepare tax returns, elections or filings. It keeps the resolutions, share issuances and supporting documents your advisers work from in one corporate record, with an activity log of every change.