QSBS Exclusion Calculator
How much of the gain on qualified small business stock is excluded, and what does the rest cost? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 6, 2026 · The full page, with methodology and sources · the terms · All tools
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The gain, the basis, when the stock was issued, and how long it was held in; the excluded gain, the cap that binds, the tax on the rest, and the saving out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
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- In plain words.
- If you were an early owner of a small company's stock and hold it long enough, the law lets you exclude some or all of the profit when you sell: up to ten million dollars per company, or more if you paid a lot for the stock. Stock issued after a recent law change gets a partial exclusion after three years and a full one after five. This tool takes the profit, what you paid, when the stock was issued, and how long you held it, and shows what is excluded and the tax on what is not.
- Why it matters.
- For a founder or early investor this can be the largest tax number of their life, and the holding period and the cap are where the planning happens before a sale.
- An example.
- Eight million dollars of profit on stock issued in the years before the law change, held six years, with $100,000 paid for it: all eight million is excluded and the federal tax is zero. Twelve million would put two million over the cap, taxed at about $476,000.
- Where it stops.
- It takes for granted that the company qualifies: a domestic C corporation under the asset limit at the time the stock was issued, in an eligible business. Those tests are the attorney's, and the answer is confirmed before the sale, not after.
The facts
Six quotable sentences on § 1202 after the 2025 amendments.
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- Gain on qualified small business stock held more than five years is excluded from income: 100 percent for stock issued after September 27, 2010, 75 percent for stock issued February 18, 2009 through September 27, 2010, and 50 percent before that (§ 1202(a)).
- For stock issued after July 4, 2025 the holding period is tiered: 50 percent excluded at three years, 75 percent at four, 100 percent at five (§ 1202(a)(5)).
- The exclusion is capped per issuer at the greater of a dollar amount or ten times the basis in the stock: $10 million for stock issued through July 4, 2025, $15 million after, indexed from 2027 (§ 1202(b)). The company's gross assets may not have exceeded $50 million at issuance, $75 million for the new stock (§ 1202(d)).
- Gain that is not excluded is taxed at up to 28 percent rather than 20 (§ 1(h)(4)), plus the 3.8 percent surtax. Example: $12,000,000 of gain on stock from the third window with $100,000 of basis: $10,000,000 excluded, $2,000,000 over the cap taxed at 20 percent plus the surtax, $476,000 in all against $2,856,000 with no exclusion.
- Example, new stock: $2,000,000 of gain on stock issued after July 4, 2025 and sold after four years is 75% excluded; the included $500,000 is taxed at 28 percent plus the surtax, $159,000 in all.
- The stock must be original issue from a domestic C corporation in an active qualified trade or business (not, among others, health, law, finance, consulting, or hospitality), and the exclusion is per taxpayer per issuer; gifts and bequests carry the holding period with them.
The exclusion by issue date and holding period
Every window, with the holding period it requires and its cap.
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| Stock issued | Holding period | Excluded | Per-issuer cap | Gross assets limit |
|---|---|---|---|---|
| On or before February 17, 2009 | More than 5 years | 50% | $10 million or 10× basis | $50 million |
| February 18, 2009 to September 27, 2010 | More than 5 years | 75% | $10 million or 10× basis | $50 million |
| September 28, 2010 to July 4, 2025 | More than 5 years | 100% | $10 million or 10× basis | $50 million |
| After July 4, 2025 | 3 years | 50% | $15 million or 10× basis | $75 million |
| After July 4, 2025 | 4 years | 75% | $15 million or 10× basis | $75 million |
| After July 4, 2025 | 5 years | 100% | $15 million or 10× basis | $75 million |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
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- Link
- https://consideratecapital.com/tools/qsbs-exclusion-calculator
- Citation
- Considerate Capital, "QSBS Exclusion Calculator," reviewed September 6, 2026, https://consideratecapital.com/tools/qsbs-exclusion-calculator.
Link to a section
- The calculator https://consideratecapital.com/tools/qsbs-exclusion-calculator#calculator
- The facts https://consideratecapital.com/tools/qsbs-exclusion-calculator#facts
- The windows https://consideratecapital.com/tools/qsbs-exclusion-calculator#key-numbers
- How the exclusion works https://consideratecapital.com/tools/qsbs-exclusion-calculator#how-it-works
- Methodology https://consideratecapital.com/tools/qsbs-exclusion-calculator#methodology
- Sources https://consideratecapital.com/tools/qsbs-exclusion-calculator#sources
- Revision history https://consideratecapital.com/tools/qsbs-exclusion-calculator#revision-history
Everything here reads from one reviewed record, so a copied piece carries its year and its review date. When the law moves, the embed updates by itself; a copied table or chart keeps the year in its caption. Corrections are welcome through the contact page.