QSBS stands for “Qualified Small Business Stock” and is regulated by the Internal Revenue Service (IRS) under code Section 1202, offering tax benefits to accredited investors, investment funds, employees, and founders. QSBS is a tax benefit on a federal and in some cases also extends to a … Read More
Welcome to QSBS 2.0 On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) ushered in a new era for QSBS. There are now two regimes: stock issued before OBBBA follows the legacy QSBS rules (max benefit ~$2.38M per eligible taxpayer), while stock issued after OBBBA is under … Read More
Introduction: How Technical Corrections Could Impact QSBS 2.0 In his article “Get Ready for A Parade of Technical Corrections on Tax Bill,” Tax Notes reporter Doug Sword noted that inevitably there will be technical corrections to the One Big Beautiful Bill Act (OBBBA). For investors, these corrections will … Read More
Companies that are engaged in activities that do not fall under the definition of a Qualified Trade or Business risk eligibility for their stock qualifying as Qualified Small Business Stock (“QSBS”). All is not lost however if a company partakes in some “non-qualified” activities. Provided the value … Read More
July 1, 2025 Today the senate narrowly passed the “One Big Beautiful Bill”. The provisions expanding IRC section §1202 / Qualified Small Business Stock (QSBS) remained unchanged from the initial version of the bill, and include: Increasing the Corporate-Level Aggregate-Asset Ceiling to $75M (from $50M prior to the bill) … Read More
June 16, 2025 The U.S. Senate Finance Committee released legislative text within the Finance Committee’s jurisdiction for inclusion in Senate Republicans’ budget reconciliation bill today. Chairman Mike Crapo (R-Idaho) noted how the bill, “powers the economy by permanently extending critical pro-growth provisions and introduces new incentives for domestic investment, providing … Read More
Many non-U.S. startup founders initially incorporate in their home country but later reincorporate or create a subsidiary in the U.S. to access venture capital financing and a larger customer base. This trend is common among tech startups and businesses seeking global expansion. Additionally, the Trump administration’s new tariff … Read More
Under IRC Section 1202(e), at least 80% of a company’s assets must be actively utilized in a “qualified trade or business”. To ensure that assets are being actively deployed towards the qualified trade, a limitation exists on the amount of working capital that can be held (IRC … Read More
In preparing for a financing round, most of the focus lands on deal terms, valuations, and investor outreach. But one of the most powerful long-term tax advantages is often overlooked: Qualified Small Business Stock (QSBS) treatment. To help founders, investors, and advisors navigate QSBS during financings, QSBSExpert.com and … Read More