Tax simulator

QSBS (Section 1202) exclusion calculator

Founder and early-employee stock can qualify for the Section 1202 exclusion, which shields a large share of the gain from federal tax when you sell, but only if the stock clears a set of specific tests. This runs those tests one at a time on your facts, and for stock that qualifies, estimates how much gain the exclusion could shield and what tax is left on the rest. The date you acquired the stock decides which rules apply, so it shows both regimes side by side.

Background reading: Equity compensation

Acquisition regimeThe acquisition date selects the rule set: legacy keeps the single 5-year / 100% rule, OBBBA uses tiered 3/4/5-year exclusions and higher caps.C-corp original-issuance stockAcquired at original issuance from a domestic C corporation (not bought from another shareholder, not S-corp or LLC).Qualifying (non-excluded) businessNot an excluded service business. This is a category screen, not a definitive SSTB ruling.Company gross assets at issuance

Aggregate gross assets immediately after issuance.Holding period (years)

yrs

Years held, or acquisition to expected sale.Adjusted basis

Basis in the stock; the 10x-basis cap alternative is computed from this.Expected sale proceeds

Hypothetical; used with basis to size the gain.Filing statusOther taxable income

Positions the gain on the long-term-gains schedule and against the NIIT threshold.State

Estimated excluded gain

$9,900,000

100% exclusion on $9,900,000 of gain under the legacy regime

Qualification tests

PassC-corp original issuanceStock must be acquired at original issuance from a domestic C corporation.
PassQualifying businessThe line of business must not be an excluded service category (health, law, finance, consulting, and similar).
PassGross-assets ceilingCompany gross assets at issuance must not exceed the QSBS ceiling for this regime.
PassHolding periodHolding period reaches the 100% exclusion tier.

Exclusion math

RegimeLegacy

Exclusion percentage100%

Per-issuer exclusion cap$10,000,000

Total gain$9,900,000

Excluded gain$9,900,000

Taxable gain$0

Estimated tax on the remainder$0

Where this goes next

This screens eligibility and estimates the exclusion; it does not tell you when to sell or how to structure your stock. That is a conversation with a CFP.

Assumptions and simplifications

QSBS rules are highly legislatively sensitive; 2025 legislation created the legacy vs OBBBA regimes by acquisition date, and the OBBBA caps index from 2027. Verify with a CFP.
The non-excluded portion of partially-excluded gain is taxed at the section 1202 maximum 28% rate; gain above the per-issuer cap is treated as regular long-term capital gain.
Eligibility here covers the main gates (C-corp original issuance, qualifying business, gross-assets ceiling, holding period); it is a screen, not a legal determination.
Tax is estimated at the relevant marginal rates plus NIIT and an optional state rate; AMT preference on pre-2010 stock and other nuances are not modeled.