QSBS Section 1202 is the most powerful tax planning mechanism available to a US founder, and one of the most poorly understood. Done right, it exempts the first $10 million (or 10× basis) of gain on qualifying small business stock from federal capital gains tax. Done wrong — by missing the gross-asset test at issuance, blowing the 5-year holding requirement, or failing to document the qualified-trade-or-business factors — and the founder owes seven figures in tax that should never have been due. The Founder & QSBS Tax Planning Pack is 60 founder and early-employee households built for the firms helping clients navigate this maze: full Section 1202 attestation chains, 5-year holding tracking, and the non-grantor trust stacking structures that turn the $10M cap into $40M+ for clients with planning runway.
QSBS planning is a documentation problem dressed as a tax problem. The 5-year holding period is straightforward; the gross-asset-test history at issuance is not (and most companies don't track it well, leaving founders to reconstruct it after the fact); the qualified-trade-or-business factors are subjective; and the stacking structures via non-grantor trusts require coordination among the founder's tax counsel, estate attorney, and the trust's grantor. The advisory firm holding this together needs structured data — not a string of emails between three professionals.
Builders of pre-IPO planning tools face the same data structuring problem in product form. Every tool promises to 'help with QSBS' but few actually structure the attestation chain, the gross-asset-test history, or the stacking-trust topology in their data model. The result is QSBS-marketing without QSBS-substance.
This Data Set provides 60 households where the QSBS structure is fully expressed in structured fields. The Section 1202 attestation chain is traceable from issuance through the client's current holding. The gross-asset-test history is captured at the issuance event. Stacking trusts are modeled as named entities with grantor-status tracking. It's the canonical fixture for any platform serving founder clients seriously.
Validates the platform's QSBS qualification verification, holding-period tracking, and stacking-strategy modeling against 60 households whose structures span the realistic range of founder situations — from straightforward 5-year holders to multi-trust stacking structures with sale events triggering distribution timing.
Tests the firm's QSBS workflow against realistic clients, including the rarely-encountered cases that will arrive when the firm scales (gross-asset-test failure at issuance, secondary-sale-related disqualification, conversion of partnership interest to corporate stock).
Validates the trust-structure documentation toolkit against households with multi-trust stacking, ensuring the grantor-status tracking, gift-event documentation, and beneficiary structures comply with the IRS's interpretive guidance on Section 1202 stacking.
Validates that the company's Section 1202 documentation (gross-asset-test history at each issuance, qualified-trade-or-business factors, no-redemption attestation) is complete enough to support employee QSBS claims, before employee exits force the question.
Tests Section 1202 disqualification scenarios on a corpus where the structures are explicit — pre-acquisition redemption events, parachute payment interactions, escrow-holdback timing — surfacing the M&A structures that would inadvertently disqualify QSBS treatment for selling shareholders.
The 60 households cluster around four archetypes — A-06 Tech Employees with Equity, P-01 Peak Earner Corporate Executives (those who took stock in lieu of cash), H-02 High Net Worth ($3M–$10M, often founder exits), and H-03 Ultra HNW ($10M+, often multi-stage founder exits or stacking structures). The mix is deliberate: about 40% pre-liquidity (still holding QSBS-qualifying stock, planning toward exit), 35% mid-liquidity (have had a partial sale that triggered planning), and 25% post-liquidity (exit completed, focused on stacking-trust mechanics for the next-generation transfer).
Every QSBS-eligible position carries a full Section 1202 attestation chain: original issuance date, gross-asset-test value at issuance (with confidence indicator since this is often reconstructed after the fact), qualified-trade-or-business factor documentation, holding-period satisfaction status with the date the 5-year mark vests, and the no-redemption attestation history. Stacking trusts are modeled as named entities — about 35% of the corpus has at least one stacking trust, with the trust's grantor status, original-issuance date, the gift or sale event that funded it, and the trust's beneficiary structure.
The Data Set ships as JSON, CSV, and Parquet. The WealthSynth Methodology PDF documents the QSBS attestation methodology, the gross-asset-test reconstruction approach, the stacking-trust topology, and the specific Section 1202 interpretive guidance the corpus is calibrated against (PLR history, the 2017 Senate report on Section 1202, and the 2023 IRS proposed regulations).
A redacted summary of one household from this Data Set — names, employers, exact balances, and metro area are stripped. Ages are bucketed, income and net worth are reported as bands. The full record (and all 60 like it) ships in the ZIP.
{
"equity_comp.qsbs_attestation": <value>,
"equity_comp.gross_asset_test": <value>,
"equity_comp.holding_period_satisfied": <value>,
"estate.qsbs_stacking_trusts": <value>,
"events.liquidity_event_history": <value>
}Returns QSBS-eligible positions whose 5-year holding period vests within the next 12 months — the planning queue for clients deciding whether to sell at vest, hold longer, or initiate stacking before sale.
households.flatMap(h =>
h.equity_comp.qsbs_attestation
.filter(p => p.years_held >= 4 &&
p.years_held < 5 &&
p.holding_period_satisfied === false)
).map(p => ({ ...p, vests_in_months:
Math.ceil((5 - p.years_held) * 12) }))Returns QSBS positions where the gross-asset-test reconstruction has low confidence (the company didn't track it cleanly at issuance) — the documentation queue for clients needing to firm up records before sale.
households.flatMap(h =>
h.equity_comp.qsbs_attestation
.filter(p => p.gross_asset_test.confidence === 'low')
)Returns clients whose unrealized QSBS gain exceeds $10M (the per-issuer exclusion cap) and who don't yet have a stacking trust structure — the prospects for whom Section 1202 stacking would meaningfully reduce ultimate tax.
households.filter(h => {
const totalGain = h.equity_comp.qsbs_attestation
.reduce((s, p) => s + p.unrealized_gain, 0);
const hasStacking = (h.estate.qsbs_stacking_trusts?.length ?? 0) > 0;
return totalGain > 10_000_000 && !hasStacking;
})For each household with stacking, returns the total Section 1202 exclusion potentially available across the founder's individual exemption plus each non-grantor trust's separate exemption — the planning value of the stacking structure.
households.filter(h => h.estate.qsbs_stacking_trusts?.length > 0)
.map(h => ({
id: h.id,
individual_exclusion: 10_000_000,
trust_exclusions: h.estate.qsbs_stacking_trusts
.filter(t => t.grantor_status === 'non-grantor')
.length * 10_000_000,
total_potential_exclusion: 10_000_000 *
(1 + h.estate.qsbs_stacking_trusts
.filter(t => t.grantor_status === 'non-grantor').length)
}))Each household's QSBS attestation chain is generated from a structurally complete model: original issuance event with date and gross-asset-test value, qualified-trade-or-business factor documentation, no-redemption history, and current holding-period status. Gross-asset-test values are sampled from realistic distributions for the company's stage at issuance — early-stage startups well under the $50M test, growth-stage companies approaching the test, and companies that crossed the threshold mid-funding-round (which would disqualify QSBS for stock issued after the cross). Stacking trusts are generated as structurally complete entities with grantor-status, formation date, and the gift or sale event that funded the trust's QSBS holding. The corpus passes the WealthSynth consistency validator (attestation chain is internally complete; trust grantor status reconciles with funding event; holding-period math is correct) and the LLM-as-judge gate. Annual refresh tracks IRS interpretive guidance updates and any state-level QSBS conformity changes.
The Data Set includes about 8% of QSBS-attestation positions where the reconstructed gross-asset-test value at issuance exceeds $50M — meaning that stock would not qualify for Section 1202 treatment even if all other requirements are met. These cases are useful for testing tools that need to flag disqualification gracefully, rather than surfacing the issue only at sale time.
Yes — about 30% of the corpus is in states that don't fully conform to Section 1202 (California is the largest example; New Jersey and Pennsylvania have partial conformity). The household tax_residency field interacts with the QSBS exclusion calculation: full federal exclusion, partial state-level exclusion. The Methodology PDF documents the state-conformity status for each state in the corpus.
Stacking trusts in the corpus are non-grantor irrevocable trusts (the only structure that gets a separate Section 1202 exclusion). About 35% of households have at least one; some have multiple trusts (typically one per child or per branch of the family). Each trust's structured data includes formation date, gift event funding the QSBS contribution, grantor-status election, and beneficiary structure. The IRS scrutiny around stacking is documented in the Methodology PDF.
Yes — Section 1045 (rollover of QSBS gain into other QSBS within 60 days) appears in about 12% of the corpus, typically for founders who exited Company A and rolled into Company B's qualifying stock. The structured rollover data tracks the 60-day window, the basis carryover, and the holding-period tacking.
Each QSBS attestation includes a structured `qualified_trade_or_business` field with the company's classification. The Section 1202 statute excludes certain businesses (services, banking, investing, restaurants, hotels) from QSBS treatment — the corpus includes about 5% of attestation positions in these excluded categories specifically to test disqualification logic.
Yes. About 15% of the corpus has at least one position that originated as a partnership interest and converted to C-corp stock at company formation. The QSBS holding-period tacking under §1202(g) and the basis-step-up at conversion are structured. This is increasingly common as software-startups initially form as partnerships then convert before raising institutional capital.
Post-liquidity households in the corpus (about 25%) have a structured liquidity-event history: IPO date, lock-up expiration, secondary-sale events, and any acquisition-related events. The interaction between the exit-event timing and the QSBS holding-period satisfaction is structured so your tools can model 'sell at exit' vs 'hold past 5-year mark' scenarios.
B16 is broader equity-comp: RSU vesting, ISO/NQSO mechanics, ESPP, AMT — across all employees with employer equity. B20 is narrowly QSBS-focused: founder and early-employee Section 1202 stock. A senior employee with both ISO grants and QSBS-eligible stock might appear in both bundles. Most tax-tech buyers purchase B16; advisors specifically focused on tech founders add B20 for the Section 1202 use case.
150 households with detailed equity compensation: RSU vesting calendars, ISO/NQSO grants, ESPP with lookback, 83(b) elections, AMT exposure, and exercise window expirations. Each grant has a structured grant_type, vesting schedule, and vested-to-date calculation.
350 households with detailed taxable brokerage positions, lot-level cost basis, unrealized gain/loss schedules, and wash-sale tracking. Specific-ID lots, holding periods, QSBS attestations, and cross-account wash-sale flags — built for direct-indexing engines and TLH backtesters.
180 households representing the full estate-planning lifecycle: peak earners building first trusts, HNW with complex multi-trust structures, late-retirees simplifying for handoff, recent inheritors navigating step-up basis, and next-gen heirs receiving distributions.
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