The arithmetic looks simple — a percentage of a gain. The part that goes wrong by hand is which rule applies to which stock, and what the cap is actually a percentage of.
| Step | Common mistake by hand | What this calculator does |
|---|---|---|
| Which rule applies | Applies the new tiered schedule to stock acquired before July 4, 2025. | Uses the acquisition date to select the correct rule — old stock keeps the all-or-nothing cliff for its entire life. |
| The exclusion cap | Uses only the fixed dollar figure, ignoring the 10x-basis alternative. | Computes both and uses whichever is greater, as the statute requires. |
| Order of operations | Applies the holding-period percentage to the full, uncapped gain. | Caps eligible gain first, then applies the percentage to that capped figure. |
| The cap's scope | Treats the cap as a fresh allowance per sale. | Flags that the cap is cumulative, per issuer, across every sale — this tool assumes a single, first-ever sale against it. |
| Is anything I enter uploaded anywhere? | N/A | No. The calculator runs entirely in your browser; nothing is sent to a server. |
Applying the new tiered 50/75/100% schedule to stock acquired before July 4, 2025. The tiered schedule only applies to stock acquired AFTER that date — earlier stock keeps the old all-or-nothing 5-year cliff for its entire life, no matter when it is eventually sold.
Using only the fixed dollar cap ($10 million or $15 million) and forgetting the 10-times-basis alternative. The cap is the GREATER of the two — for a large gain on a small basis (common when basis is low, like an early employee's exercised options), the fixed dollar figure usually governs, but for a large basis it can be the 10x-basis figure that is actually higher.
Applying the holding-period percentage to the total gain instead of to the CAPPED eligible gain. The cap is applied first to determine eligible gain; the percentage is then applied to that capped figure, not to the full, uncapped sale gain.
Treating the per-issuer cap as a fresh allowance for every sale. It is cumulative, per issuer, across every sale of that company's stock a taxpayer ever claims the exclusion against — a second sale from the same issuer does not get a second full cap.
No. Neither this calculator nor a by-hand worksheet built from this page verifies whether the stock actually qualifies as QSBS, tracks your cumulative prior exclusions against this issuer, or accounts for day-precision holding-period timing. Both apply the same published federal rules to the numbers you enter; verify against IRS guidance or a qualified tax professional before relying on either.