Fenwick partner William Skinner recently spoke with Tax Notes about how the “One Big Beautiful Bill” expands the qualified small business stock (QSBS) gain exclusion, helping early-stage investors and founders avoid paying capital gains tax when they sell stock in qualifying start-ups.
In an article published the day before the federal tax, spending, and policy bill was signed into law, Skinner described how the QSBS rule allows investors to benefit from partial exclusions if they sell before meeting the current five-year holding period. The change “avoids the cliff effect of five years” for founders and outside investors who may need to exit or sell earlier, he told Tax Notes.
He also pointed out that raising the asset threshold from $50 million to $75 million could allow more companies to qualify for QSBS treatment, even if they have already crossed the original limit. If they stay below the new cap, they could still issue qualifying stock under the new rules.
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