QSBS Exclusion Calculator (2026)
Qualified Small Business Stock can shelter a large gain from federal tax — but the break depends on holding period, the asset cap, and whether your state conforms. Most calculators ignore the state layer; FiscTalk flags it.
OBBBA created a tiered holding schedule: 3 years → 50%, 4 years → 75%, 5+ years → 100% exclusion, with the per-issuer cap raised to $15,000,000 (or 10× basis) for post-enactment stock. The gross-asset test rose to $75,000,000.
QSBS relief is exempt from AMT and NIIT. State conformity varies widely — many states don’t follow federal QSBS, so state tax can still apply. Check the state guide for the relevant jurisdiction.
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Tax outcomes depend on your full facts, filing history, and jurisdiction-specific rules that change yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology
- IRS — Tax inflation adjustments for tax year 2026 (Rev. Proc. 2025-32) — Internal Revenue Service
- IRS Pub. 15 (Circular E), Employer’s Tax Guide 2026 — Social Security wage base $184,500 — Internal Revenue Service
- IRS Pub. 15-T (2026), Federal Income Tax Withholding Methods — Internal Revenue Service
- IRS Form 1041-ES (2026) — capital gains rate thresholds — Internal Revenue Service
- OBBBA (One Big Beautiful Bill Act), Pub. L. 119-21 — SALT, estate, QBI, QSBS, senior deduction — Internal Revenue Service
What this tool does
How to use it
- 1Enter the total gain on sale and your cost basis.
- 2Enter the holding period in years — the tier (50/75/100%) is applied automatically.
- 3Toggle the OBBBA rules (default on) to use the $15M per-issuer cap.
- 4Read the result cards: exclusion tier, excluded gain, taxable gain, and per-issuer cap.
Worked examples
Run the same scenario through the calculator above to verify every number — they come from the same sourced dataset.
$5,000,000 gain, 3-year holding period, $1,000,000 basis
$20,000,000 gain, 5-year holding period, OBBBA rules
$50,000,000 gain, 5-year holding period, OBBBA rules
What this tool does not cover
- Eligibility (C corp, $75M gross asset cap, original issue, 5-year hold, non-service business) is assumed — verify each requirement against IRS guidance.
- Federal only — state conformity varies; check the state guide for your state’s QSBS treatment.
- The 10×-basis alternative is shown when it exceeds the per-issuer cap; complex aggregations need a professional.
Common questions
What is the QSBS exclusion?
Section 1202 lets you exclude part or all of the gain from selling Qualified Small Business Stock: 50% after 3 years, 75% after 4, and 100% after 5+ years, up to the greater of $10,000,000 or 10× your basis (capped at $15,000,000 per issuer under OBBBA).
How much QSBS gain can I exclude in 2026?
After a 5-year holding period you can exclude 100% of qualifying gain up to the $15,000,000 per-issuer cap (or 10× adjusted basis if larger). Beyond the cap, the excess is taxable.
What are the QSBS eligibility requirements?
The stock must be issued by a domestic C corporation with gross assets under $75,000,000, acquired at original issue, held 5+ years, and the corporation cannot be a service business in most cases. You must also have received it in exchange for cash, property, or services.
Do states conform to the QSBS exclusion?
Not always. Some states fully conform, others partially or not at all — the state guides flag each state’s QSBS conformity status so you know if state tax remains on the excluded gain.