Section 1202 fundamentals, in plain English. Guides, tools, and a learning lab covering QSBS from formation through exit.
Most people meet §1202 at the exit, when it is far too late to fix anything. The conditions have to hold from the day the stock is issued. The Learning Lab follows that order.
Entity choice, original issuance, the gross-assets test, and the basis consequences of converting an LLC.
The active business requirement, the disqualified-services list, asset use, and the redemption rules that quietly kill eligibility.
§1045 reinvestment, the 60-day window, tacked holding periods, and how a rollover interacts with the tiered exclusion.
The tiered holding period, the per-issuer cap, stock vs. asset deals, earnouts, escrow, and reporting the exclusion.
Per-taxpayer mechanics, non-grantor trusts, gifting under §1202(h), and where the doctrine risk really sits.
Four questions, in order. Answer them and you know whether §1202 is even on the table.
For stock acquired after July 4, 2025, the five-year cliff is gone and the dollar thresholds moved. Stock acquired on or before that date stays under the old rules. Most cap tables now hold both, and each block has to be analyzed on its own terms.
Read the breakdown →The 50% and 75% tiers exclude only part of the gain; the rest is taxed under the pre-existing rules. Selling at three years is not a free option. It changes the math.
Short notes on the parts of the statute founders and advisors get wrong, plus a plain reading of new guidance when it lands.
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