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Free tool · United States

How much tax could you save selling QSBS?

Qualified Small Business Stock (Section 1202) can let you exclude federal tax on up to the greater of $10M or 10× your basis in gains — often tax-free. Estimate what you could exclude when you sell.

Federal tax you could save
$—
tax excluded on the QSBS-eligible gain
Total gain$—
QSBS-excludable gain$—
Taxable remainder$—
Federal tax on remainder$—
Estimated tax saved$—

A rough directional estimate — not tax advice. QSBS (Section 1202) has strict tests: a domestic C-corporation, gross assets under $50M when the stock was issued, an active business, original issuance, and generally a 5-year holding period. The exclusion cap is the greater of $10M or 10× your basis. Many states (notably California) do not conform, so state tax may still apply. This tool assumes full federal exclusion when you select “yes” and ignores AMT/other adjustments. Confirm eligibility with a qualified US tax adviser before relying on it.

Why QSBS matters when you sell: if your startup shares qualify, a large chunk of your gain can be completely free of federal tax — often the single biggest lever in a sale. It’s worth checking before you agree a secondary, because timing and holding period affect eligibility.

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Questions people ask

What is QSBS and Section 1202?
Qualified Small Business Stock (QSBS) is stock in a qualifying US C-corporation that, under Section 1202 of the tax code, can let the holder exclude federal capital-gains tax on a large portion of the gain when sold. The exclusion is capped at the greater of $10 million or 10 times the holder's basis in the stock.
What are the main QSBS requirements?
Broadly: the company must be a domestic C-corporation with gross assets of $50 million or less when the stock was issued; the stock must be acquired at original issuance; the company must run an active qualifying business; and the stock generally must be held for at least five years. State conformity varies — some states, such as California, do not follow the federal exclusion.
Does QSBS apply if I sell in a secondary before 5 years?
The full exclusion generally requires a 5-year holding period. Selling earlier can mean the gain doesn't qualify, though a 'Section 1045 rollover' into other QSBS may defer it in some cases. Because timing is critical, check your holding period and eligibility with a tax professional before agreeing a sale.

General information only — not financial, tax or legal advice. Every situation is different; confirm your own numbers with a qualified adviser. PrivateTechShares makes introductions only: it is not a broker, does not hold funds, and does not execute or advise on transactions. Figures use simplified assumptions and exclude many real-world factors.