Section 1045 rollover for the deferral of QSBS gains has to meet the 60-day requirement. When convertible notes are acquired they are considered debt securities because it is a hybrid debt and equity, acting as interest-bearing debt until the note is converted to equity on the conversion date. The conversion date could be in months or years depending on when the preferred round happens to convert the note. Since convertible notes are treated as debt securities they do not qualify as QSBS until they are converted; therefore, convertible notes would not qualify for the Section 1045 rollover unless they converted within the 60 day reinvestment period.

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