Qualified Small Business Stock (“QSBS” or “Section 1202 stock”) is stock acquired in a US corporation that was a “small business” when the investment was made.
If held for more than 5 years, upon exit, the gains are tax free for US federal income tax purposes.
Gains on small business stock held for at least 6 months, but less than the full 5 years, can be deferred or potentially permanently excluded if they are reinvested into another small business within 60 days of the original exit. These gains available for reinvestment are referred to as Section 1045 gains.
AngelList and its affiliates are not tax advisors and do not provide tax advice. All decisions regarding the tax implications of your investments should be made in consultation with your independent tax advisor.