"QSBS has long been a valuable tool for founders and investors, allowing them to exclude the greater of $10 million or ten times their cost basis from capital gains tax when selling qualified stock of a domestic C corporation held for more than five years-provided certain conditions are met. The OBBBA enhances this framework by increasing the per-issuer limitation from $10 million to $15 million, indexed for inflation, for QSBS issued after July 4, 2025."
"Even more transformative is the introduction of partial exclusions starting in year three, enabling founders and investors to access the exclusion sooner than ever before. For QSBS issued after July 4, 2025, eligible gains can be excluded on the following scale: This phased approach is particularly significant in today's fast-paced market, where the ability to pivot and adapt can mean the difference between success and failure. Founders can now plan their exits with greater flexibility,"
OBBBA increases the QSBS per-issuer exclusion from $10 million to $15 million, indexed for inflation, for stock issued after July 4, 2025. OB BBA introduces phased, partial exclusions beginning in year three, enabling earlier access to tax exclusions. The act raises the gross asset threshold for qualifying domestic C corporations from $50 million to $75 million, allowing more companies to issue QSBS. The changes make QSBS benefits available to larger startups and support larger capital raises while preserving tax advantages. Founders and early-stage investors gain greater exit flexibility and planning options in faster-moving markets.
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