QSBS Capital Gain Exclusion Calculator

Quantify how much of your qualified small business stock gain Section 1202 shields from taxes. Enter the gain amount, the exclusion percentage your shares qualify for, and your combined capital gains rate to reveal the excluded dollars, residual taxable gain, and the net federal and state taxes still owed. Optional fields let you break out the state portion or simulate an AMT preference clawing back part of the exclusion.

Enter the eligible long-term gain you expect to exclude under Section 1202.
Percentage of the gain eligible for exclusion (often 100% for post-2010 QSBS).
Stack your federal long-term rate, NIIT, and state capital gains percentage if applicable.
Optional. Defaults to 0%. Enter if you want to separate state savings from federal in the results.
Optional. Defaults to 0%. Enter the share of excluded gain treated as an AMT preference item to model potential AMT claw-back.

Section 1202 eligibility is fact-specific. Consult a qualified tax professional before finalizing plans based on these estimates.

Examples

  • $3,500,000 gain, 100% exclusion, 28.8% combined rate, 5% state rate, no AMT ⇒ Excluded gain: $3,500,000.00 • Taxable gain remaining: $0.00 • Estimated tax saved: $1,008,000.00 • Estimated tax still due after exclusion: $0.00 • Effective blended tax rate on total gain: 0.00% • State exclusion value: $175,000.00.
  • $2,000,000 gain, 50% exclusion, 23.8% combined rate, AMT preference 28% ⇒ Excluded gain: $1,000,000.00 • Taxable gain remaining: $1,000,000.00 • Estimated tax saved: $171,360.00 • Estimated tax still due after exclusion: $304,640.00 • Effective blended tax rate on total gain: 15.23% • AMT claw-back modeled on 28.00% of excluded gain.

FAQ

How do I know whether my shares qualify for 100% exclusion?

QSBS issued after September 27, 2010 that meets the Section 1202 criteria generally qualifies for a 100% exclusion, but always confirm eligibility with your tax advisor.

Can I model only federal savings?

Yes. Enter your federal long-term capital gains percentage (plus NIIT if applicable) in the combined rate box and leave the state rate optional field blank.

What cap applies if my gain exceeds $10 million?

The exclusion is limited to the greater of $10 million or 10× your stock basis per issuer. Run separate scenarios for the portion above the cap to see what remains taxable.

Does the calculator account for installment sales?

Not directly. Estimate the total gain eligible for exclusion and divide by the portion recognized each year to determine the excluded amount per installment.

Additional Information

  • Section 1202 allows up to 100% of qualified small business stock gains to be excluded, subject to original issue, active business, and gross asset tests.
  • Combined rate should include the 3.8% net investment income tax plus any state capital gains tax you pay.
  • AMT preference modeling assumes the flagged percentage is taxed at the federal component of your combined rate.

Related calculators