QSBS Exclusion (Section 1202) — Tax Deduction Guide 2026
Exclude up to $10M or 10x basis of gains from qualified small business stock.
Eligibility
Investors in qualified small business stock
Tax Savings Calculator
Estimated Tax Savings
$1,100
At the 22% tax bracket, a $5,000 deduction saves you $1,100 in taxes.
Savings by Tax Bracket
Requirements
- 1C-corp with <$50M assets
- 2Held 5+ years
- 3100% exclusion up to $10M
Common Mistakes to Avoid
- !Not meeting C-corp requirement
- !Selling before 5 years
Required Tax Forms
QSBS Exclusion (Section 1202) by State
State rules and tax rates affect the value of this deduction. Check your state for localized guidance:
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Frequently Asked Questions
What is the QSBS Exclusion (Section 1202)?
Exclude up to $10M or 10x basis of gains from qualified small business stock.
Who is eligible for the QSBS Exclusion (Section 1202)?
Investors in qualified small business stock
How much can I save with the QSBS Exclusion (Section 1202)?
The average tax savings is $100,000 per year. The maximum deduction is $10,000,000. Your actual savings depend on your tax bracket and qualifying amount.
What forms do I need for the QSBS Exclusion (Section 1202)?
You'll need to file Form 8949 and Schedule D to claim this deduction.
What are common mistakes with the QSBS Exclusion (Section 1202)?
Common mistakes include: Not meeting C-corp requirement; Selling before 5 years. Always double-check requirements before filing.
Is the QSBS Exclusion (Section 1202) worth claiming?
With average savings of $100,000, the qsbs exclusion (section 1202) is highly valuable. Make sure you meet all eligibility requirements.