How to read it
- A dollar result is only useful after every eligibility check is confirmed.
- The stock issue date changes the company-size limit, dollar cap, and holding rule.
- State tax may not follow the federal exclusion.
Business Owners calculator
QSBS Exclusion Calculator and Eligibility Check
Could part of my gain from company stock be excluded from federal tax?
Screen a possible federal tax break for qualifying small-business stock.
Before you calculate
Start with the decision
Could part of my gain from company stock be excluded from federal tax?
Qualified small-business stock may allow some federal gain to be excluded, but the stock and company must pass several tests. This screen checks the issue period, years held, company size, original issuance, C-corporation status, and active-business answer before showing a potential amount.
Before you act on the number
See what the result means—and what could change it.
What could change the answer
- A legal conclusion that the stock is qualified
- Company redemptions, conversions, gifts, trusts, or Section 1045 rollovers
- Every excluded trade or active-business test
- State income tax or tax on gain that is not excluded
What to take forward
Use the result to identify which assumption needs verification, then bring that question to the professional helping you make the decision.
Transparent method
How the estimate works
See how the estimate is calculated
Use the stock issue period and years held to find the possible federal exclusion percentage under Section 1202.
Check the company-asset limit, U.S. C-corporation status, original issuance, and active-business answer before treating the number as a possible exclusion.
Apply the issue-date dollar cap, prior exclusions from the same company, and the separate ten-times-basis limit to the gain entered.
Common questions
Frequently asked questions
What is QSBS?
QSBS means qualified small-business stock. Section 1202 can exclude some federal gain when the stock, company, holding period, and sale meet the rules.
Does every small company qualify?
No. The company generally must be a U.S. C corporation, meet an asset limit when stock is issued, use enough assets in a qualified business, and satisfy other rules.
How long must I hold the stock?
Older stock generally needs a five-year holding period. Stock issued after July 4, 2025 can receive a partial exclusion after three or four years and a full percentage after five years.
What records should I ask the company for?
Ask for the issue date, how you received the stock, company tax status, asset level when issued, business activity, later redemptions, and any prior QSBS analysis.
Sources
Rules and references behind this calculator
Want the fine print? See sources, methods, and limits.