Tax Exclusion/Gain Calculation

Calculating the Exclusion: How Do I Calculate My QSBS Capital Gains Tax Exclusion?

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The aggregate gain from sales of QSBS eligible stock issued by any corporation is subject to limits specified in IRC Section 1202(b). 

Each year that a shareholder sells QSBS, the total gain that may be taken into account for each issuing corporation is limited to the greater of:

  • $10 million less the total amount of gain previously excluded from such QSBS (the “cumulative limitation”), or
  • Ten times the adjusted basis of the QSBS issued to the taxpayer from the corporation.

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This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.

About QSBS Expert

QSBS Expert was founded by a group of entrepreneurs, investors, accountants and lawyers who came together when trying to navigate a QSBS situation of their own. We quickly realized that the regulations left a lot of open questions and the publicly available information was confusing to sift through…so we thought that others may also benefit from having a “go to” resource for all things QSBS.