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 state level. The tax benefit excludes 100% of capital gains on the sale of QSBS held for 5 years with tax savings up to the greater of $10 million or 10x the initial investment if the company qualifies as a Section 1202 qualified small business. Below is additional information about QSBS.
Applying for QSBS
- Do I Need To Apply for QSBS?
- Do I Need To Keep Records of My Stock’s QSBS Qualification?
- How is the Section 1202 QSBS Capital Gains Exclusion Reported on My Tax Return?
QSBS Related Tax Code Sections
- Section 1045 Application To Partnerships
- Section 1045 Rollover
- Code Section 613
- Code Section 1411
- Code Section 304(a)
- Updated Code Section 1202
- Rule 501 of Regulation D
- Original Code Section 1202
- Section 351
- Section 368
QSBS Related Definitions
- What is a SAFE Note?
- What Is Fair Market Value?
- What Is Net Investment Income Tax?
- What is a Stock Redemption?
- What Constitutes a Tax-Free Stock Transfer?
- What is a Pass-Through Entity?
- What is an Accredited Investor?
- What is a C Corporation?
- What is a tiered partnership?
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.