Finance

QSBS Exclusion Calculator

Find the excludable gain on qualified small business stock under Section 1202.


QSBS Exclusion Calculator

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One of the most valuable exclusions in the tax code for startup founders and early investors — potentially excluding the entire gain from federal tax.

How it works

The exclusion cap is the greater of $15,000,000 or 10 times the original cost basis. For stock issued on or after July 4, 2025, the exclusion percentage tiers in by holding period — 50% at 3 years, 75% at 4 years, and the full 100% at 5 years or more.

What this does not include

QSBS eligibility has strict requirements — the issuing company must be a C corporation with under $75 million in gross assets at issuance, among other conditions — this calculator computes the exclusion amount assuming eligibility, not eligibility itself.

How to use this calculator

  1. Enter the original cost basis and realized gain.
  2. Enter years held.

Frequently asked questions

Does QSBS apply to stock issued before July 4, 2025?

Older QSBS rules apply an all-or-nothing 100% exclusion at the 5-year mark with a $10 million cap (not indexed for inflation) rather than the newer tiered structure — a different rule set this calculator’s newer-rules version doesn’t compute.

Why is the cap the “greater of” two figures?

To ensure very early, low-basis investors still get a meaningful dollar exclusion even if 10x their tiny basis would be small — the flat $15 million floor protects that case.

Is there a state-level QSBS benefit too?

Some states conform to the federal QSBS exclusion and some don’t — a state-specific detail this calculator’s federal-only computation doesn’t address.

Important: This is general information, not financial advice. Figures are estimates, and your lender or provider decides the real numbers. Check with a qualified adviser before acting on them.

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Written by

M. Whitfield

Personal finance writer

M. Whitfield writes the personal finance calculators, covering loans, mortgages, savings, tax and investment maths. The focus is on showing exactly which number goes into a formula and which assumptions a result depends on, so readers can tell when a figure applies to their situation and when it does not. Every finance page states what it does not account for as plainly as what it does.

Reviewed by

A. Whitfield-Reyes

Calculator reviewer — finance

A. Whitfield-Reyes reviews the finance calculators, checking compounding conventions, rate-period alignment, and whether each page is explicit about the costs and tax treatment it leaves out. Financial results are easy to state with false precision, so review focuses on whether the page makes its assumptions visible to a reader who is not looking for them.

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