Does California allow the QSBS exclusion?

No. California is one of the few states that does not conform to IRC Section 1202. Full gains are subject to California personal income tax rates.

Updated: August 2026 • Verified v1.2

Qualified Small Business Stock (QSBS) Section 1202 Capital Gains Calculator

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Exclusion_Cap = Max(Filing_Dollar_Cap, 10 * Adjusted_Basis); Excluded_Gain = Min(Capital_Gain, Exclusion_Cap) * Exclusion_%

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Understanding Your Results

Details statutory exclusion percentage (100%, 75%, or 50%), effective dollar limitation cap, taxable excess, and estimated federal tax savings.

Practical Guidance & Next Steps

Stock acquired after Sept 27, 2010 enjoys 100% federal exclusion from regular income tax, AMT preference, and the 3.8% Net Investment Income Tax (NIIT).

What is this?

A specialized tax planning calculator that determines federal capital gains tax exclusions under IRC Section 1202.

How does it work?

1. Select acquisition date tier (100%, 75%, 50% exclusion). 2. Enter cost basis and exit proceeds. 3. Choose filing status and state conformity. 4. View excluded gain, taxable remainder, and federal tax savings.

Why use it?

Helps founders and angel investors plan exits to maximize legitimate multi-million dollar federal tax exemptions.

Technical Scope & Calculation Limitations

Assumes stock satisfies all statutory requirements (C-corp at issuance, $50M gross assets test, active business test, 5-year holding period).

Frequently Asked Questions

Section 1202 caps the eligible gain at the GREATER of $10,000,000 or 10 times the taxpayer's aggregate adjusted tax basis. If you invested $2M, your cap is $20M instead of $10M.

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