QSBS Stacking Calculator

IRC §1202's exclusion cap — the greater of $15M or 10× your basis per issuer — applies to each taxpayer separately. A founder with a $40M QSBS position can only exclude $15M as a single taxpayer. But if the same position is distributed across a spouse and one or two non-grantor irrevocable trusts before the sale, each entity gets its own $15M cap. Enter your numbers to see exactly how much each additional stacking slot is worth.

Total position value at sale ($) Expected proceeds from your entire QSBS position at the liquidity event.

Total cost basis ($) Your adjusted tax basis in all shares. Founders who paid nominal consideration (e.g., $0.0001/share) typically have basis well under $500K.

Stock issuance date Determines whether pre-OBBBA ($10M cap) or post-OBBBA ($15M cap) rules apply, and sets the holding-period clock.

Planned sale date Determines the exclusion tier: 0% before first threshold, then 50% / 75% / 100% based on hold length and issuance date.

Maximum stacking slots to model Each slot is a separate federal taxpayer: you, your spouse, or a non-grantor irrevocable trust.

How the per-taxpayer, per-issuer cap creates a stacking opportunity

The §1202 exclusion limit is not a household limit or a deal limit. The statute sets it per taxpayer, per issuing company.¹ Two separate taxpayers each holding QSBS from the same company can each independently claim up to $15M (post-OBBBA) of excluded gain from that company.

For §1202 purposes a "taxpayer" means any entity that files a separate federal return: an individual, a married-filing-jointly couple (one taxpayer for this purpose), or a non-grantor irrevocable trust. Each is its own unit with its own $15M cap. By transferring QSBS shares to additional separate taxpayers before the sale, a founder can apply multiple $15M caps to what is economically the same set of deal proceeds.

Worked example — $40M position, pre-OBBBA stock, 5-year hold:

1 slot (founder alone): cap = $15M (with low basis). Excluded: $15M. Taxable: $25M. Fed tax: ~$5.95M.
2 slots (founder + spouse): each holds $20M. Cap per slot = $15M. Each gain ($20M) > cap, but combined: $30M excluded, $10M taxable. Fed tax: ~$2.38M.
3 slots (founder + spouse + 1 trust): each holds ~$13.3M < $15M cap → fully excluded per slot. Fed tax: $0.

Stacking 1 → 3 slots on a $40M gain saves approximately $5.95M in federal tax. The structure must be documented and funded before the liquidity event closes.

Stacking vehicles: what counts as a separate taxpayer

Slot Type	Separate Taxpayer?	Key Notes
You (individual)	Yes — baseline slot 1	Your own exclusion cap on your shares.
Spouse — direct gift	Yes (files own return or MFS)	Interspousal transfers between US citizen spouses are gift-tax-free under IRC §2523 (unlimited marital deduction). Donee spouse takes carryover basis. Spouse must actually hold the shares and be the seller — proceeds cannot contractually revert to you.
Non-grantor irrevocable trust	Yes — its own federal return (Form 1041)	Must be structured so the grantor has no retained economic benefit that triggers grantor-trust status under §§671–679. Gifts to the trust use the donor's lifetime exemption ($15M in 2026 per OBBBA) or annual exclusions ($19,000 per beneficiary in 2026).² Each separate trust = a separate taxpayer = another $15M cap.
Adult children — direct gift	Yes — each child files separately	Each child is a separate taxpayer with their own cap. Gift tax applies on amounts above $19,000 annual exclusion per donee (2026). Child must own and sell the shares.

Grantor trusts do NOT create a second exclusion. The most common planning trust — the IDGT (Intentionally Defective Grantor Trust) — is transparent for income tax: you are still the taxpayer on trust income. The trust's QSBS gains count toward your §1202 cap, not a separate one. Only trusts where the grantor has genuinely given up control and the trust files its own income tax return create a new exclusion unit. If you hear "put your QSBS in a trust," confirm explicitly with counsel that it is a non-grantor trust for income tax purposes.³

Regulatory note — Treasury scrutiny on aggressive stacking. Treasury has signaled it is developing guidance on QSBS trust stacking, with particular concern about strategies involving large numbers of trusts without genuine family beneficiaries. Stacking across a spouse and one or two trusts with real, intended beneficiaries is well-supported by the current statute. Creating six trusts for a founder with one child is the kind of aggressive structure Treasury has flagged. This is an active area — coordinate with tax counsel and a QSBS specialist, not just a template.⁴

Timing: the structure must be in place before the sale

QSBS stacking is a pre-liquidity strategy. Once a tender offer closes or acquisition consideration is paid, the stacking window is gone. Key mechanics:

Gift the stock itself — before the sale. The donee must hold actual QSBS shares and be the seller of record. Gifting cash after the sale produces no §1202 benefit.
Holding period tacks on gifts (IRC §1223(2)). The donee inherits your holding period. A trust receiving 4-year-old QSBS today has a 4-year clock — not a fresh one. This matters for which exclusion tier the trust can claim at sale.
Carryover basis. The donee takes your adjusted basis in the gifted shares. The 10× basis test is applied to the donee's proportional basis per their share of the position.
Lead time for trust formation. Setting up a non-grantor irrevocable trust takes weeks to months: drafting, execution, trustee acceptance, funding. A deal with a 30-day close timeline may not leave enough runway. Start early.

The 28% rate trap for post-OBBBA stock at the 3- and 4-year tiers

For stock issued after July 4, 2025, selling at the 50% (3-year) or 75% (4-year) tier means the unexcluded eligible portion is taxed at 28% — higher than the 23.8% rate on regular long-term capital gains. Stacking reduces the total gain that isn't excluded, but it doesn't change the 28% rate on whatever unexcluded eligible gain remains. If your post-OBBBA stock is approaching 5 years and the economics allow waiting, the calculation almost always favors patience over stacking at a partial tier.⁵

Related tools and guides

Model the math — then build the structure before the deal closes

Stacking requires completed gifts, irrevocable trusts, and careful coordination before the liquidity event. The decisions that determine your outcome have to be made while the sale is still in the future. Get matched with a fee-only advisor who handles QSBS stacking — trust structure, timing, and pre-exit sequencing — for no fee and no obligation.

Sources

IRC § 1202 — Partial exclusion for gain from certain small business stock: per-taxpayer, per-issuer exclusion limit; post-OBBBA $15M or 10× basis cap; tiered 50%/75%/100% exclusion for stock issued after July 4, 2025.
IRS — Tax inflation adjustments for tax year 2026 (including OBBBA): 2026 annual gift exclusion confirmed at $19,000 per donee; estate/gift exemption $15M per OBBBA.
IRC §§ 671–679 — Grantor trust rules: when the grantor is treated as owner of trust for income tax purposes; why grantor trusts do not create a separate §1202 taxpayer.
Withum — Treasury signals increased scrutiny on QSBS trust stacking strategies: Treasury Assistant Secretary Kies statement on pending guidance; concern about structures with more trusts than family beneficiaries.
IRC § 1202(b)(4): 28% rate on the non-excluded eligible gain at 3/4-year partial exclusion tiers (post-OBBBA stock issued after July 4, 2025).
IRC § 1223(2) — Holding period tacking for gifted property: donee inherits donor's holding period; carryover basis rules for determining 10× test per slot.

Tax values verified June 2026. Pre-OBBBA stock (issued ≤ July 4, 2025): $10M or 10× basis cap, 5-year hold for 100% exclusion. Post-OBBBA stock (issued after July 4, 2025): $15M or 10× basis cap, tiered 50%/75%/100% exclusion. 2026 annual gift exclusion: $19,000 per donee (IRS Rev. Proc. 2025-XX). Calculator estimates only — not tax or legal advice.