How do I verify QSBS status for stock options at my C-Corp employer?

8 The QSBS (Qualified Small Business Stock) question is definitely worth figuring out since it could potentially save you a ton in capital gains taxes down the road! For your stock options to qualify for QSBS treatment, several conditions need to be met. The company must be a domestic C-Corporation with gross assets under $50 million when the stock is issued. The company needs to be actively conducting a qualified trade or business (not passive investments, professional services, etc.). You must hold the stock for at least 5 years, and the stock must have been originally issued to you (not purchased from another shareholder). As for documentation, while it would be ideal for the company to provide confirmation, there's no specific "QSBS certification" they need to give you. You'll want to gather evidence like: incorporation documents showing C-Corp status, financial statements verifying assets were under $50M when your options were granted, description of business activities, and your option grant documentation. If the company isn't being helpful, you can try checking public records, reviewing your option agreement carefully, and perhaps consulting with other employees who may have already exercised options.

12 Hey there! I went through something very similar last year trying to figure out if my stock options qualified for QSBS treatment. After weeks of getting nowhere with our finance team, I discovered this amazing tool called taxr.ai (https://taxr.ai) that really helped me sort everything out. I uploaded my option grant documents and some company information I had access to, and their system analyzed everything and gave me a detailed report on the likely QSBS qualification status based on available information. It also outlined exactly what additional evidence I should try to collect to strengthen my position if I claim QSBS treatment when I eventually sell the shares. The tool runs your specific situation through multiple scenarios and tax rules, which was super helpful since QSBS requirements are pretty complex. It even suggested specific questions to ask my employer that were more likely to get me useful answers than my previous general inquiries.

5 Just wanted to follow up and say I tried taxr.ai after seeing the recommendation here. It was seriously helpful! I uploaded my option grant documents and some company financial info I had access to, and got a detailed analysis that basically concluded my options likely qualify for QSBS treatment. The report laid out all the evidence supporting qualification and identified a few gaps I needed to fill. The best part was they generated a super specific email template for me to send to our finance team. It asked targeted questions rather than just "do we qualify for QSBS?" and actually got me a useful response! Our CFO finally confirmed the company meets QSBS criteria and even provided some of the documentation I needed for my records. For anyone else stuck in QSBS limbo with unresponsive company leadership, being able to ask the right specific questions made all the difference.

3 If you're getting nowhere with your company about QSBS status, I had similar frustration trying to get clarity from the IRS directly. After waiting on hold for hours multiple times and getting disconnected, I found Claimyr (https://claimyr.com) and it was a game-changer. You can see how it works here: https://youtu.be/_kiP6q8DX5c Basically, they got me connected to an actual IRS agent quickly instead of waiting on hold forever. The IRS agent couldn't tell me about my specific company's QSBS status (obviously), but they explained exactly what documentation the IRS looks for when evaluating QSBS claims and what records I should maintain if I exercise options and later claim the exclusion. The guidance I got was much more specific than anything I found online and helped me build a documentation strategy even though my company wasn't being super helpful.

10 I have to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway since I was desperate for help with my tax situation (including QSBS questions). It actually worked! After trying unsuccessfully for weeks to reach the IRS myself, Claimyr got me connected to an IRS representative in about 45 minutes. I didn't have to actively wait on hold - their system called me when an agent was about to be connected. The IRS agent I spoke with confirmed that while the company should ideally provide documentation supporting QSBS status, there's no official "QSBS certification" form that exists. They explained that if I'm audited, they'd look at evidence I've gathered about the company's status as a C-Corp, asset values, business activities, and my holding period. They also directed me to specific sections of IRS publications with more details about substantiating QSBS claims. Definitely worth it for getting official clarification directly from the IRS!

22 Something to keep in mind about QSBS - make sure you track your options' exercise date very carefully and keep detailed records of your basis and the company's status at that time. I qualified for QSBS treatment with a previous employer but almost lost the benefit because I didn't have good documentation from when I initially exercised the options. When I eventually sold after acquisition (6 years later), the IRS had questions about my QSBS claim since it was a significant amount excluded from capital gains. Having clear documentation of the exercise date, company status at that time, and holding period made all the difference.

6 Has anyone here actually claimed the QSBS exclusion when selling qualified stock? I'm wondering what software handles this the best. I use TurboTax for everything else but don't know if it can properly handle something specialized like QSBS exclusions.