QSBS Tax Strategies

QSBS Tax Strategies

• Meet QSBS Requirements (Optimal Tax Treatment). The QSBS tax exemption can allow you to exclude 100% of capital gains (up to $10 million; perhaps more). But you must meet a large number or criteria.

• Exercise ISOs/NSOs Prior to a QSBS Disqualifying Event. If you own options in a company about to disqualify for QSBS, exercising your options before this event allows the purchased shares to qualify for preferential QSBS Treatment.

• QSBS "Stacking" (Via Gifts and Using Trusts). Gifting QSBS stock and/or utilizing irrevocable trusts can allow you to multiply the QSBS tax exclusion well beyond $10 million.

• QSBS "Packing" (Invest with Property). Investing more than $1mm in a QSBS eligible company enables a QSBS exclusion above $10mm via the 10x rule. Property can also be invested (vs. cash), which increases strategic options.

• QSBS 1045 Exchange. If your QSBS is sold before meeting the 5-year holding period, you can consider rolling the gains into a new QSBS investment using a 1045 exchange to maintain QSBS eligibility.

Cross-Listed Tax Strategies

In addition to the above QSBS tax strategies, a number of other tax strategies may also apply in certain situations. We encourage you to review all of the strategies detailed on the 50+ Tax Strategies page to ensure you have the proverbial "full menu" of tax planning strategies to consider for your situation.