QSBS §1202 Exclusion Calculator

Entity type at issuance

Stock acquired (date)

5-year holding period met?

Cost basis at issuance

Sale price

Corp gross assets ≤ $50M at issuance?

Active business (80% test) met?

Qualified trade (not SSTB/finance/farm)?

Long-term cap gain rate % (taxable portion)

2024 §1202 Picture

Realized gain

Per-issuer exclusion cap

Excludable gain

Taxable gain (remainder)

Federal tax saved

AMT preference (post-2010 stock)

None

Per §1202(b)(1), per-issuer cap = greater of $10M (lifetime, less prior excl.) or 10× aggregate adjusted basis of QSBS sold this year. 100% exclusion for stock acquired after 9/27/2010 per §1202(a)(4), no AMT preference (§57(a)(7) inapplicable).

Three §1202 angles most founders miss

1. Gift stacking. Each donee gets their own $10M cap. Gifting QSBS to a non-grantor trust or family member resets the limit. 2. §1045 rollover. Held <5 years and selling? Roll proceeds into new QSBS within 60 days, tack the holding period. 3. State conformity. California and Pennsylvania do NOT conform, full state tax due even if 100% federal exclusion. Florida has no income tax (perfect QSBS state).

Have us run the §1202 analysis

2024 figures. §1202 requires: (a) original-issuance C-corp stock, (b) corp gross assets ≤$50M at issuance through immediately after, (c) 80% active-business test in qualified trade (not SSTB, banking, farming, mineral, hotel/restaurant), (d) 5-year holding (§1045 rollover available if shorter). Per §1202(a)(4), 100% exclusion for stock acquired after 9/27/2010, no AMT preference. Tax saved is federal only; state varies (CA, PA, NJ do not conform). Educational tool, not legal advice. Call 689-331-5723 or email info@zerofusstaxes.com.