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Get a Hold of Your QSBS Holding Period

Just how much taxable gain can your start-up founder exclude from tax?

As originally enacted in 1993, Section 1202 of the Internal Revenue Code introduced a 50 percent exclusion from taxable gain (with certain limitations) on the sale of so-called “qualified small business stock” (QSBS) held by an individual for more than five years.1 IRC Section 1202 was subsequently amended to provide an increased exclusion of 75 percent for QSBS acquired after Feb. 17, 2009 and before Sept. 28, 2010 (the 75 percent exclusion period), and a 100 percent

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