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Unlock Tax-Free Capital Gains with Section 1202

Cut Your Federal Capital Gains Tax to Zero

If you’re a founder, investor, or advisor holding stock in a U.S. small business, you could legally eliminate up to 100% of your capital gains tax. Our team helps you determine if your stock qualifies under IRC §1202 – QSBS and build a proactive strategy around it.

Section: What Is QSBS?

Qualified Small Business Stock (QSBS) refers to stock in a C corporation that meets specific federal tax requirements under Section 1202 of the Internal Revenue Code. For stock acquired before July 4, 2025, holding qualifying shares for at least 5 years may allow you to exclude up to $10 million (or more, based on 10× basis) of capital gains from federal income tax. For stock issued after July 4, 2025, the exclusion cap increases to $15 million, and partial exclusions may apply if shares are held 3 or 4 years (50% or 75%), with full exclusion at 5 years.

Section: Who Qualifies for the QSBS Exemption?

You may qualify if:

  • You acquired original shares in a domestic C corporation

  • The business had less than $50 million in assets at the time of issuance

  • At least 80% of its assets are used in active business

  • You’re not in an excluded field (e.g., accounting, law, consulting, finance, etc.)

  • You’ve held the stock for 5+ years

  • You are the original purchaser (not via secondary market)

Section: Puerto Rico & QSBS – Special Note

While QSBS is a federal provision, certain Puerto Rico residents may still benefit, depending on their tax residency and U.S. source income. We’ll walk you through how Act 60 and QSBS can interact, and what that means for you.

Section: Why Work With Us?

At Saavedra CPA LLC, we go beyond basic tax prep. We focus on clarity, strategy, and value, helping founders and investors across industries maximize tax savings, while staying fully compliant.

    • CPA-led advisory

    • Forward-thinking tax strategy

    • Detail-focused analysis

    • Trusted by founders and professionals across the U.S. & Puerto Rico

Section: Let’s Talk QSBS

The earlier you plan, the better your outcome. Don’t leave a multi-million dollar exemption on the table. Let us help you make the most of Section 1202:

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