QSBS Exclusion Calculator — Section 1202, Free

How much of your QSBS gain is excluded?

The One Big Beautiful Bill Act replaced Section 1202's old all-or-nothing 5-year cliff with a tiered exclusion — 50% at 3 years, 75% at 4 years, 100% at 5 years — for stock acquired after July 4, 2025, and raised the per-issuer cap to $15 million. Stock from before that date still follows the old rule. This tool runs either rule on your own numbers.

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1. Which rule applies

When was the stock acquired?

Years held

The rule depends on when you ACQUIRED the stock, not the year you sell it — stock acquired before the enactment date keeps the old all-or-nothing rule for its entire life.

2. Your numbers

Total gain on sale ($)

Your adjusted basis in the stock ($)

The exclusion cap is the greater of a fixed dollar figure or 10 times your basis — a low basis (common for early founders/employees) usually means the fixed dollar cap governs.

Fill in the acquisition era, years held, gain, and basis, then click Calculate.

What this does not cover

Not a full tax return. This computes one exclusion on one sale — not total tax liability, other deductions or credits, AMT, or state tax (state conformity to Section 1202 varies).
Does not verify QSBS eligibility. Original issuance, C-corp status, active-business requirements, and the gross-assets threshold at issuance are company-level facts this tool does not check.
No cumulative-cap tracking. The per-issuer cap is lifetime and cumulative across every sale of that issuer's stock; this tool assumes a single, first-ever sale against the cap.
No day-precision holding-period timing. The statute requires holding for MORE than the stated number of years; confirm your exact closing date against your acquisition date with a tax professional near a milestone.

Common questions

What changed about QSBS under OBBBA?

For stock acquired after July 4, 2025 (OBBBA's enactment date), Section 1202 gained a tiered holding-period schedule — 50% exclusion at 3 years, 75% at 4 years, 100% at 5 years — replacing the old all-or-nothing 5-year cliff. The per-issuer exclusion cap also rose from the greater of $10 million or 10x basis to the greater of $15 million or 10x basis.

Is there really no partial exclusion under the old rule?

Correct. For stock acquired on or before July 4, 2025, Section 1202 was strictly all-or-nothing: hold for more than 5 years and exclude 100% of eligible gain; sell even a day earlier and exclude 0%. There was no 3- or 4-year partial exclusion under the old rule at all.

How does the per-issuer cap work?

Eligible gain is capped at the greater of a fixed dollar figure ($10 million old rule, $15 million new rule) or 10 times your adjusted basis in the stock — whichever is larger. This cap is cumulative, per issuer, across every sale of that company's stock you ever claim the exclusion against, not a fresh allowance for each sale.

Which rule applies to my stock?

The rule depends on when you ACQUIRED the stock, not the tax year you sell it in. Stock acquired on or before July 4, 2025 follows the old all-or-nothing rule for its entire life, even if you sell it in 2027 or later. Stock acquired after that date follows the new tiered rule.

Does this verify that my stock actually qualifies as QSBS?

No. Qualifying as QSBS in the first place depends on company-level facts this calculator does not check — original issuance, C-corp status, active-business requirements, and the gross-assets threshold at issuance. This tool only computes the shareholder-level exclusion math once you already know the stock qualifies.

Is this tax advice?

No. This calculator applies the published federal Section 1202 exclusion rules to the numbers you enter. It does not verify QSBS eligibility, track your cumulative prior exclusions against this issuer, or account for day-precision holding-period timing, and it is not a substitute for reviewing IRS guidance or consulting a qualified tax professional before you file.