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§1202 QSBS Stacking Across Multiple Trusts

Multiply the $10M QSBS gain exclusion by gifting QSBS shares into non-grantor trusts — each gets its own $10M cap.

Overview

IRC §1202 excludes up to the greater of $10M or 10× basis of gain on Qualified Small Business Stock held 5+ years. Each non-grantor trust (Nevada/Delaware/South Dakota preferred) counts as a separate taxpayer with its own $10M cap. Founders gift QSBS to spouse, kids' trusts, dynasty trusts BEFORE the exit is imminent (gift must be economic, not step-transaction). 5 trusts × $10M = $50M tax-free. Requires C-corp with <$50M aggregate assets at issuance, active business, 5-year hold.

Best fit
C-corp founders / early employeesPre-liquidity event QSBS holdersEstates >$25M
Estimated impact
$2.3M+ federal tax saved per additional $10M exclusion stacked

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