QSBS Tax Incentives: Insights from FICPA on New Section 1202 Enhancements

FICPA explores how recent updates to §1202 strengthen the benefits available under Qualified Small Business Stock (QSBS), making the incentive even more appealing for founders and early-stage investors. The article features insights from Peter Stratos, CPA, MST, a principal in Kaufman Rossin’s international tax and transactions department, who explains how the new provisions expand eligibility, increase gain exclusions, and offer more flexibility around holding-period rules.

“These higher exclusion amounts and expanded eligibility provisions can meaningfully increase the benefits available to founders and early investors,” Stratos notes, emphasizing that the updates may also help entrepreneurs who need liquidity sooner while still preserving tax advantages.

For clients, these enhancements may present new opportunities to reduce capital gains exposure and optimize exit planning strategies. Startup founders, angel investors, and venture capitalists should evaluate whether their current or future investments may qualify under the revised QSBS framework.

Read the full article in FICPA.

Want to explore how QSBS planning could affect your tax strategy? Connect with our Tax Services team to learn more.