QSBS Rollovers (Section 1045)

Section 1202's exclusion requires a minimum holding period. When an exit arrives early, Section 1045 provides the escape hatch: sell QSBS held more than six months, reinvest the proceeds into new qualified small business stock within 60 days, and the gain is deferred. Critically, the holding periods tack. Time in the old stock counts toward the exclusion requirements of the new stock.

Why it matters more after OBBBA

For stock issued after July 4, 2025, the exclusion now phases in at 50% after three years, 75% after four, and 100% after five. A rollover that bridges a company sale at year two into new QSBS can carry you across those thresholds rather than forfeiting the benefit entirely.

Practical constraints

• 60 days is short. Sourcing a qualifying reinvestment, a C corporation under the $75M gross asset threshold engaged in a qualified trade, on that clock requires the target to be identified before the sale closes.
• Partial rollovers work. You can roll a portion and recognize the rest. The deferral is proportional to the amount reinvested.
• The new stock must itself qualify. Diligence on the recipient company's QSBS status is not optional; a defective target collapses the deferral.
• Election mechanics. The rollover is elected on a timely filed return. Missed elections are hard to fix.

Our role

Rollovers are logistics problems as much as tax problems. We maintain visibility into qualifying reinvestment options through our venture network, work through the partial-rollover math, and manage the timeline so the 60-day window does not close on you.