Why QSBS Rollovers?

Do you have a gain from the sale of Qualified Small Business Stock (QSBS)? You may have heard about QSBS rollovers (IRC 1045) which enable QSBS gain holders to defer taxes and multiply their exclusion eligibility under IRC Section 1202, potentially paying zero in taxes on their entire QSBS gain. We can help you navigate the QSBS rollover process through a unique partnership program that is well-suited for those with QSBS rollover gains.

You could benefit from a QSBS rollover if:

  • You recently sold QSBS before the 5 year minimum hold period

  • You recently sold QSBS that you held for 5 years, but your gain exceeds $10M

  • You’re considering an exit in the next 1-4 years and want to think ahead about tax planning

  • Are an angel investor seeking flexible QSBS opportunities to help defer gains

Under IRC Section 1045, Qualified Small Business Stock (QSBS) holders may utilize a “QSBS rollover” to defer taxes when selling their QSBS before meeting the five-year holding period required for the Section 1202 exclusion. This need could arise from liquidity demands, financial pressures, or favorable market conditions prompting an early sale of stock. In these cases, a QSBS rollover allows holders to defer gains by reinvesting the proceeds into another QSBS opportunity/business within 60 days, preserving potential future QSBS exemption benefits while addressing immediate financial needs.

Additionally, the $10M per issuer exclusion cap under IRC Section 1202 limits the gain that can be excluded from federal income tax when selling QSBS. For those seeking to defer gains above this cap, the QSBS rollover offers a viable solution. By reinvesting excess proceeds into new QSBS within 60 days, investors can defer gains, potentially benefiting from an additional issuer exclusion cap of $10M in the future while meeting immediate financial needs or strategic investment goals.

QSBS Finder is a marketplace of QSBS-eligible* investments opportunities in an interface that makes it easy to identify and connect with the right stakeholders who can help you complete a rollover within the narrow 60-day rollover period.