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QSBS Checklist

If one or more items below is not true, stop. You do not qualify for QSBS tax treatment.

If you answered “Yes” or “Maybe” to all of the questions above, you might qualify for QSBS treatment. Discuss the fine print with your tax advisor to determine next steps




Personal Requirements


  • The stock was acquired after 8/10/1993 and held for at least five years.
  • The shares were issued directly from the company, or through a qualified transfer (such as gift or inheritance).



Company Requirements


  • The company is a domestic C Corporation.
  • The company had less than $50,000,000 in assets when you acquired the shares, and immediately after your shares were issued.
  • Since you acquired the shares, at least 80% of the company’s assets have been used in the conduct of a qualified active trade or business, defined anything except the following: 
    • Businesses whose principal asset is the reputation or skill of one or more employees, such as consulting, architecture, financial advice, brokerage services, law, accounting, etc.
    • Banking, insurance, financing, leasing, investing, farming, hotels, motels, restaurants, mineral extraction, and all other businesses specifically excluded under 1202(e)(3).
  • The company did not purchase any of its stock from you (or a related person) within two years prior or two years after your acquisition date.
  • The company did not buy back more than 5% of its stock within one year prior or one year after your acquisition date.  



You can use this QSBS calculator to estimate your potential federal tax savings


The information contained in the checklist should not be relied upon as specific tax or legal advice, and its accuracy cannot be guaranteed. Consult with your tax and legal advisors regarding your personal situation. None of the above is intended to apply to corporate taxpayers or those holding their shares via a Pass-Thru as defined under 1202(g).