Small Business Tax Savings Podcast · Mike Jesowshek, CPA

Sell Your Company with $0 Taxes? QSBS Explained

·32 min·2 clips

Alessandra Chesser reveals how QSBS offers up to $10 million in tax-free capital gains for startup founders.

This episode features CPA Mike Jezishek and Alessandra Chesser, founder of tax strategy firm Git Dynasty, explaining the Qualified Small Business Stock (QSBS) exemption. Chesser describes QSBS as the greatest tax exemption available, applicable to startup founders, early employees, executives, and investors in qualified small businesses. To qualify, shares must be acquired before the company has $50 million in assets, the business must be technology-focused rather than a service firm, and the stock must be held for a minimum period. The discussion clarifies that banks, law firms, and traditional service businesses do not qualify, as the rule aims to spur technology and innovation. A company can qualify with up to $50 million in gross assets, and holders can exclude up to $10 million in capital gains from federal taxes, with some states also recognizing the exemption. Chesser shares her experience flipping an LLC to a C-corp during a venture round, which created a $126 million QSBS eligibility pool based on ten times the contributed value. Recent legislative changes now allow a 50% exclusion after three years, 75% after four years, and 100% after five years, while the asset limit has increased to $75 million and the exclusion cap to $15 million for new issuances. Chesser notes that in high-tax states like New York, using QSBS can save approximately $6 million in taxes on a $15 million gain. She explains that Git Dynasty helps founders create trusts for family members to multiply the $10 million per taxpayer exclusion, using the example of the Roblox CEO who established twelve trusts for $120 million in tax-free gains. A common mistake is delaying QSBS planning until a financing round or exit is imminent, which can create complications. The conversation also covers the trade-offs between operating as a pass-through entity for current tax benefits versus converting to a C-corp for a future tax-free exit. The tone is educational and conversational, aimed at demystifying a complex tax code provision for entrepreneurs. This episode is ideal for startup founders, early-stage employees, and investors seeking legal strategies to minimize capital gains taxes upon a company sale. Listeners running traditional service businesses or those with no plans to sell their companies may find the content less applicable.

As heard by us

A clear QSBS primer that makes exit tax math feel immediate.

This segment makes QSBS feel usable instead of abstract. Alessandra Chesser and Mike Jezishek lay out who can use the exclusion, explain the jump from $10 million to $15 million for eligible stock issued after July 4, 2025, and use a New York example to show why the tax math…

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Why you'd press play

You want the QSBS rules without the tax-code fog.

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