Investor-Ready QSBS Attestation Letters
409.AI helps companies prepare a clear QSBS attestation letter for diligence, shareholder requests, and advisor review.
QSBS is Qualified Small Business Stock under IRC Section 1202: when stock meets the Section 1202 requirements, eligible shareholders may be able to exclude a portion of the capital gain on sale, subject to company and shareholder facts confirmed with a tax advisor.
At a glance
| Report | QSBS attestation letter |
|---|---|
| Summary | Investor-ready Section 1202 QSBS attestation letters for diligence, shareholder requests, and advisor review. |
| Price | From $999 |
| Jurisdiction | United States |
What the attestation supports
- Investor diligence
- Shareholder tax-prep conversations
- Financing or transaction readiness
- Internal recordkeeping
Frequently asked questions
What is QSBS?
QSBS stands for Qualified Small Business Stock under IRC Section 1202. When stock meets the Section 1202 requirements, eligible shareholders may be able to exclude a portion of the capital gain when they sell it. Whether stock qualifies depends on company and shareholder facts that should be confirmed with a tax advisor.
What are the QSBS requirements under Section 1202?
Section 1202 generally requires that the issuer be a domestic C corporation, that the company gross assets did not exceed the applicable threshold at issuance, that the company runs a qualified active trade or business, and that the shareholder acquired the stock at original issuance and meets the holding period. Exact qualification is fact-specific and should be reviewed with a tax advisor.
What is the QSBS tax treatment and exemption?
Qualifying QSBS can allow a shareholder to exclude eligible capital gain from federal tax, subject to per-issuer limits and the holding period. The specific exclusion percentage and caps depend on when the stock was acquired, so confirm current figures and eligibility with a qualified tax advisor.
How long do you have to hold QSBS?
Section 1202 has generally required a minimum holding period (historically five years) for the full gain exclusion. Confirm the current holding-period rules and any recent changes with a tax advisor before relying on them.
Is a QSBS attestation legally required?
No. The letter is supporting documentation for diligence and advisor conversations. It is not legally required to claim QSBS.
Is this tax or legal advice?
No. The attestation letter organizes company-provided facts and should be reviewed with qualified tax and legal advisors.
Who is the letter for?
It is designed for companies responding to investors, shareholders, acquirers, finance teams, and outside advisors asking for QSBS context.
What documents are usually helpful?
Helpful records often include incorporation documents, stock issuance records, financing history, cap table context, and business activity information.
Can this help before a financing or exit?
Yes. Organizing the company record before diligence can make QSBS conversations smoother when investors, shareholders, or acquirers ask questions.