In an era of economic uncertainty and shifting regulations, the One Big Beautiful Bill Act (OBBBA) presents a notable opportunity for entrepreneurs and early-stage investors. Among its provisions is a significant overhaul of the Qualified Small Business Stock (QSBS) rules—changes that could dramatically reshape the financial future for countless founders.
What’s New with QSBS?
QSBS has long been a valuable tool for founders and investors, allowing them to exclude the greater of $10 million or ten times their cost basis from capital gains tax when selling qualified stock of a domestic C corporation held for more than five years—provided certain conditions are met. The OBBBA enhances this framework by increasing the per-issuer limitation from $10 million to $15 million, indexed for inflation, for QSBS issued after July 4, 2025.
Even more transformative is the introduction of partial exclusions starting in year three, enabling founders and investors to access the exclusion sooner than ever before. For QSBS issued after July 4, 2025, eligible gains can be excluded on the following scale:
50% after three years
