QSBS Exclusion Calculator (Section 1202)
Calculate qualified small business stock gain exclusion.
Qualification Checklist
| Criterion | Status | Detail |
|---|---|---|
| C Corporation | ✓ Met | |
| Assets < $50M at issuance | ✓ Met | Assets: $40.0M |
| Original Issue | ✓ Met | |
| Held 5+ years | ✓ Met | Held: 5.0 years |
| Issued after Aug 1993 | ✓ Met | |
| Active Business | ✓ Met |
Gain Calculation
Purchase:$ 100000
Sale:$ 500000
Gain:$ 400000
Exclusion Analysis
Limit:$ 10000000
Excluded:$ 400000
Taxable:$ 0
Tax Savings
Federal Saved:$ 80000
Tax on Remaining:$ 0
State (may apply):$ 20000
Many states (CA, NY, etc.) do NOT conform to Section 1202. Excluded gain may still be taxable at state level. Check your state conformity rules.
Recommendation
Fully qualified! Entire gain $400000 excluded. Federal tax saved: $80000. Note: Many states don't conform - state tax may apply on $400000.
QSBS Key Rules
- Section 1202 exclusion for QSBS
- Up to $10M per issuer (or 10x basis)
- Must be C corporation
- Assets under $50M at issuance
- Original issue direct from corp
- Held more than 5 years
- Active business (80%+ test)
- Stock issued after Aug 10, 1993
- Exclusion is 100% for post-Sept 2010
- 50% exclusion for pre-Sept 2010
- AMT may apply for large gains
- Form 8949 for reporting