When purchasing QSBS the company has to be a C Corporation on the date of the purchase, but not before. If the business was formed as a different legal structure (e.g. LLC, S Corporation, Partnership) it can be terminated or revoked to be incorporated as a C Corporation before the issuance/sale of the stock. It is harder to convert from an S Corporation to a C Corporation because an S Corporation would have to transfer its stock to a C Corporation, which stock for stock transfers do not qualify for QSBS. In a more complex way the business owners of an S Corporation could transfer the assets of the S Corp to a C Corp in exchange for QSBS under Section 351(a). In short, if the stock received from the C Corp qualifies as QSBS the owners of the S Corp will realize the QSBS tax exclusion through their S Corp K-1. 

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