QSBS Tax Planning

Miller & Company, LLP delivers an expert level of service to every client engagement. When you schedule a Section 1202 tax planning consultation in New York City, Florida or Washington, DC, you can expect experienced tax planning expertise. This level of qualified small business stock tax planning provides you with the lowest possible tax burden, but it’s best performed when you let the pros start at the very beginning. Find out if your small business qualifies for QSBS tax planning by calling the nearest Miller & Company office today.

What Makes QSBS Tax Planning a Powerful Tool for Business Founders?

Qualified small business tax (QSBS) planning gives business founders and early investors the legal ability to eliminate federal capital gains tax entirely on the sale of your company stock. Under Section 1202 tax planning rules, business founders can earn an extraordinary reward if you take the right steps from the start. But most founders don’t discover QSBS tax planning until it’s too late.

At Miller & Company, LLP, a qualified small business stock CPA works with you from the earliest stages, so the window for founder tax planning opens early and stays open. “The founders who benefit the most from our QSBS CPAs are the ones who bring us in at the beginning, not when the term sheet arrives,” says Paul Miller, CPA and founder of Miller & Company.

Which Businesses Qualify for Qualified Small Business Stock Planning in New York?

Not every business qualifies for Section 1202 tax planning. Differentiating between a tax-free exit and a fully taxable one is the reason you need a QSBS CPA. To gain the full benefits of qualified small business stock tax planning, your business must meet certain conditions, and missing even one can permanently disqualify the shares. Eligibility criteria include:

• The company must be structured as a domestic C-corporation when the stock is issued.
• The company’s total gross assets must not have exceeded $75 million at the time of issuance of shares, issued after July 4, 2025 or $50 million for shares issued before that date.
• Stock must be acquired through original issuance directly from the company.
• At least 80 percent of the company’s assets must be actively used in qualifying business operations throughout the entire holding period.

Certain industries are automatically excluded from QSBS tax planning, regardless of their structure or size, including companies operating in:

• Healthcare
• Law
• Accounting and financial services
• Consulting
• Banking
• Insurance
• Hospitality and restaurants

This exclusion list eliminates a big portion of founders and investors, but it also makes an early eligibility review with an expert QSBS CPA important. Founders looking to evaluate whether their current structure supports qualified small business stock tax planning find that the review naturally fits into a broader business tax strategy and corporate tax planning engagement as well.

New York doesn’t exclude Section 1202. Thus, coordinating federal QSBS tax planning treatment with NYS residency and domicile planning is one of the most impactful services that a qualified small business stock CPA at Miller & Company can provide for founders.

How Much of My Gain Can a QSBS CPA Help Me Exclude from Federal Tax?

A QSBS CPA at Miller & Company can help you exclude up to 100 percent of your federal capital gains tax on the sale of a qualifying security. The exact amount depends on how long you’ve held your stock. For example, there’s a:

• 50 percent exclusion for stock held for at least three years
• 75 percent exclusion for stock held for at least four years
• 100 percent exclusion for stock held for five or more years

Timing your sale correctly represents millions of dollars in tax exposure. A qualified small business stock CPA helps you manage this holding period so you get the maximum benefit. For founders whose gains exceed the $15 million per taxpayer limit, a strategy known as QSBS stacking can multiply the exclusion.

Gift and wealth transfer planning specialists can show you how to gift shares to family members or transfer them into properly structured trusts before a sale. If you prefer to donate appreciated shares rather than gift them, you can explore a charitable giving tax-planning strategy to eliminate the remaining taxable portion entirely.

What Did the One Big Beautiful Bill Act Change About Section 1202 Tax Planning?

The One Big Beautiful Bill Act (OBBBA) made significant changes to QSBS tax planning. It raised the gross asset threshold to $75 million from $50 million for stock issued after July 4, 2025. This single change delivered thousands of additional growth-stage companies across New York and beyond into Section 1202 tax planning.

“The OBBBA expanded who can benefit from qualified small business stock tax planning, but still requires careful planning by a QSBS CPA,” says Miller. “Founders who invest in expert founder tax planning from the beginning are best positioned for the most powerful tax-free exit In the US.”

How Does Miller & Company Protect My QSBS Tax Planning from Start to Finish?

Miller & Company, LLP stands out because of its commitment to engaging with you from the company’s formation. When QSBS positions fail at exit, it’s due to decisions made years earlier. You can avoid an ill-timed stock redemption, a pivot into a disqualified industry or a funding round that pushed gross assets beyond the threshold. The founder tax planning team at Miller & Company monitors every variable throughout the holding period.

Paul Miller has been a certified accountant since 1992. He has over three decades of experience in expert founder tax planning with early investors, founders and equity holders across New York City, Florida and Washington, DC. Contact the nearest office to set up a consultation.

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