QSBS Capital Gains Tax Calculator 2026 (IRC Section 1202)

Qualified small business stock (QSBS) under IRC Section 1202 may exclude a large share of eligible gain from federal tax when acquisition-date, holding-period, and issuer tests are met. This calculator seeds the QSBS flag so you can compare an exclusion estimate with ordinary business-stock treatment.

Rates last verified: August 2026

Capital Gains Calculator

Federal · NIIT · All 50 states

2026 ratesIRS verified

Follow the three steps, save the sale, then calculate. Required fields are marked with *.

Your tax profile

These apply to every sale in this estimate.

Tax year

Filing status

State

Annual taxable income (before these gains)

Capital loss carried from prior years

What you sold

Prices and quantity for this lot. Give it a name if you will add more than one sale.

Asset type

Asset name

Buy price

Sell price

Quantity / units

Selling expenses

Qualified Small Business Stock (Section 1202)

When you bought and sold

The IRS uses these dates to decide short-term vs long-term rates.

Buy date

Sell date

Next: Save this sale to the order log, then click Calculate now. Tax results do not update until you calculate.

Order log

Sales included in this tax estimate.

Please fill in the details to see your results. Follow the three steps on the left, then save a sale here.

How Section 1202 QSBS exclusion works in this estimate

This model applies Section 1202 only after a more-than-five-year hold, capped at the greater of $10 million or 10 times basis. That is the pre-4 July 2025 rule as implemented here. Stock acquired after 4 July 2025 is not modeled for a $15 million cap, a 50% exclusion at three years, a 75% exclusion at four years, or a $75 million gross-asset limit.

Checking QSBS applies that modeled federal exclusion to eligible gain. Leftover gain is still stacked as capital gain. This tool does not audit original-issuance paperwork, active-business tests, or redemption history.

California adds a modeled federal QSBS exclusion back into the state tax line. This tool only adjusts California. Check your state’s rules. Indexable comparisons include California QSBS, Texas QSBS, Florida QSBS, Washington QSBS, New York QSBS, Missouri QSBS, and Arizona QSBS.

Business stock that is not QSBS is taxed like other capital assets: more than one year for long-term rates, plus NIIT when MAGI is high enough. Use the stocks calculator for public-company shares.

Stocks calculator How to calculate gain Schedule D and Form 8949

QSBS tax by state

Also see

Other calculators, how we model the numbers, and IRS Topic 409.

All 50 states Stocks & ETFs Crypto Real estate Collectibles Methodology IRS Topic 409

FAQ

Frequently asked questions

What is QSBS under Section 1202?

Qualified small business stock is generally original-issue C-corporation stock that meets asset-size, active-business, and holding-period tests. Eligible gain may be excluded from federal tax up to a statutory cap. This calculator models an exclusion when you check QSBS; it does not certify that your shares qualify.

How long must I hold QSBS?

In this calculator, the exclusion requires a more-than-five-year hold and uses the pre-4 July 2025 cap. A one-year hold is not enough. Stock acquired after 4 July 2025 is not modeled for shorter holding periods.

Does every state honor the QSBS exclusion?

No. Federal exclusion does not automatically mean state exclusion. Some states decouple from Section 1202. This estimate applies the state’s general capital-gains model to remaining taxable gain after the federal exclusion we model.

Should I use this page or the stocks calculator?

Use this QSBS lander for privately issued qualifying small-business stock. Use the stocks and ETFs calculator for brokerage shares, ETFs, and mutual funds.

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