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.

QSBS History

Applying for QSBS

QSBS Related Tax Code Sections

QSBS Related Definitions

63 thoughts on “What is QSBS?”
  1. […] QSBS purchased after September 28, 2010, is eligible for a $10M or 10x the initial investment tax exclusion on 100% of capital gains taxes, alternative minimum taxes (AMT), and net investment income tax (NIIT). Even though NIIT was not established until January of 2013, QSBS purchased before September 28, 2010, is subject to the 3.8% of NIIT for the portion of the non-excludable gain. […]

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