QSBS Holding Period

SAFE QSBS

Are SAFEs safe for QSBS?

Simple Agreements for Future Equity, otherwise known as SAFEs, exist thanks to the startup accelerator Y-Combinator’s 2013 innovation.  With a SAFE, an investor makes a cash investment in a company, but the actual amount of stock they receive is determined at a later date, in connection with a … Read More

An example of a Section 351 tax-free transaction

In 2012, ABC Corp raised $20 million in funding with an investor leading the round with a $5 million investment. The newly issued stock qualified as QSBS. Three years later the ABC Corp was acquired under a Section 351(a) tax-free stock exchange transaction. The acquirer exchanged newly issued non-QSBS for 100% … Read More

When Does My Timeline Start for QSBS?

The required holding period for Section 1202 QSBS starts the day the stock is acquired/issued.  If stock was acquired through other securities such as convertible debt or stock options, the holding period for QSBS generally starts on the date the securities are converted to the stock. The following list shows … Read More