What is the QSBS stock exclusion?
QSBS stock exclusion refers to the Section 1202 federal tax provision allowing eligible taxpayers to exclude up to $10 million or ten times their stock basis in capital gains when selling qualified small business stock. Stock must be issued by a domestic C Corporation with gross assets under $50 million, acquired at original issue, and held for at least five years. The exclusion percentage ranges from 50% to 100%, depending on the acquisition date, with stock acquired after September 2010 eligible for a complete federal tax exclusion. This provision encourages investment in small businesses while offering significant tax savings to qualifying entrepreneurs and early-stage investors.
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