QSBS Gets a Makeover — What Section 1202 Changes Mean for Founders

If you’ve ever dreamed of selling your business someday — even a small one — the updated Qualified Small Business Stock (QSBS) rules under Section 1202 might be one of the most powerful tax tools you’ve ever heard of.

The One Big Beautiful Bill Act (OBBBA) revamped Section 1202, expanding tax benefits for founders who hold stock in qualifying C‑corporations. And while many solopreneurs operate as LLCs or S-Corps, these changes are worth understanding if you ever plan to scale, raise capital, or exit.

Photo by Kelly Sikkema on Unsplash

✅ What changed?

According to The Tax Adviser, the OBBBA introduced:

• A tiered holding period with graduated capital gains exclusions

• A higher per‑issuer gain exclusion cap

• An increased gross asset threshold (from $50M to $75M)

These updates make QSBS more accessible and more lucrative for small business owners.

✅ Why this matters for women 50+

If you’re building a business with long‑term value, a brand, a product line, a tech platform, or a membership community, you may eventually want to sell. QSBS can allow you to exclude up to $10M–$15M in capital gains from taxes.

✅ Who qualifies?

To use QSBS:

• Your business must be a domestic C‑corporation

• You must hold the stock for the required period

• The company must use 80% of its assets in an active business

• Certain service‑based businesses are excluded

✅ What you can do now

• Talk to your CPA about whether converting to a C‑corp makes sense

• Start documenting your business assets and activities

• Learn how QSBS interacts with exit planning

✅ Final thought

Even if you’re not planning to sell today, understanding QSBS now helps you build with intention.

Source: The Tax Adviser — QSBS Gets a Makeover

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CompliantHer™ program of (Relannford Enterprises LLC) is not a law firm. This document is intended for educational and informational purposes only and does not provide medical, legal, or financial advice. If you have questions about your specific situation, please consult a physician, attorney, or accountant licensed to practice in your state and/or country.

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