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Free Qualification Check

QSBS Qualifier

Six questions. Determine whether your small-business stock qualifies for Section 1202 exclusion, up to $10M of gain tax-free at the federal level.

Answer each question based on your specific stock. Disqualifying answers heavily weight the verdict.

  1. 1. Was the stock issued by a domestic C-corporation?

  2. 2. Was the stock issued after August 10, 1993?

  3. 3. Did you acquire the stock at original issuance (or by gift / inheritance from the original holder)?

    Secondary purchases (buying stock on the open market or from another shareholder) typically don't qualify.

  4. 4. Were the corporation's gross assets at issuance under $50M?

  5. 5. Is the corporation engaged in a qualified trade or business?

    Excluded: banking, insurance, farming, mining, professional services (law, health, accounting, consulting), restaurants, hotels.

  6. 6. How long have you held (or plan to hold) the stock before sale?

Answer all questions to see your result.

Email me what to do with this number.

Next: the Section 1202 records to keep from day one, the five-year holding period, and what a reorganization does to it. We send short, partner-written reads on tax, accounting, and finance, and nothing else. The calculator itself stays free and needs no sign-up. No spam, unsubscribe anytime.

Get the QSBS position documented

This quiz screens the main Section 1202 tests. Whether the position actually holds depends on the issuer's gross-asset history at issuance, the original-issuance record, and how the holding period survives any reorganization or stock swap.

Our CPA-led tax practice reviews the documentation, confirms the eligible gain, and reports the exclusion on the return.

Read the Section 1202 walkthrough

Frequently Asked

QSBS questions

What does QSBS qualification do?
Under §1202, federal capital gains tax on qualifying small-business-stock gains can be excluded, up to $10M or 10x the original basis, whichever is greater. OBBBA 2025 introduces a tiered exclusion: 50% at 5+ years, 75% at 6+, 100% at 7+.
Does California honor QSBS?
No. California does not conform to §1202, state tax of up to 13.3% still applies on the gain even when federal is excluded. Other non-conforming states include New Jersey, Alabama, and Pennsylvania.
What if I have to sell before 5 years?
Section 1045 lets you roll the proceeds into a new QSBS within 60 days, deferring the gain and preserving the qualification holding period (the new stock inherits the original's holding period).

Keep reading

Glossary

QSBS (Qualified Small Business Stock, §1202)

A tax provision excluding up to $15M of capital gain on qualifying small business stock (stock issued after July 4, 2025; $10M for earlier stock).

Glossary

Form 1120 (C-Corporation Return)

The annual federal income tax return filed by C-corporations to report the entity's own income, deductions, and tax due; the corp pays tax at 21%.

Glossary

C-Corporation (C-corp)

A corporation taxed as its own taxpayer at a flat 21%, with a second layer of tax when profits are distributed to shareholders as dividends.

Glossary

Capital Gains

Profit from selling a capital asset (stock, a business, real estate), taxed at preferential rates when the asset was held more than one year.

Guide

Opportunity Zones: Capital Gain Deferral and Tax-Free Growth

Defer (and potentially eliminate) capital gains tax by investing in Qualified Opportunity Funds. Here's how it works and when it makes sense.

Guide

Section 1202 QSBS: Up to $15M Gain Tax-Free

Qualified Small Business Stock can exclude up to $15M (or 10× basis) of gain from federal tax for stock issued after July 4, 2025, $10M for earlier stock. Here's eligibility, both regimes, and the holding rules.

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