Tax
Section 1045 Rollover (QSBS)
Quick definition
Lets QSBS holders defer gain by rolling proceeds into other QSBS within 60 days, with holding period tacking.
Section 1045 lets QSBS holders who haven't held shares for 5 years (and thus can't yet exclude gains) sell and reinvest proceeds in other QSBS within 60 days — gain is deferred and the holding period from the original investment tacks. Critical exit-planning tool: lets you sell early without losing §1202 eligibility on the rolled portion. Strict 60-day window; coordinate with tax counsel before selling.
Related tax terms
R&D Tax Credit
Federal credit for qualified research expenses, usable against payroll tax by startups.
Delaware Franchise Tax
Annual tax for Delaware corporations, often quoted wildly too high if calculated incorrectly.
Nexus (Sales Tax)
The connection with a state that triggers a tax-collection obligation.
QSBS (Qualified Small Business Stock)
Tax exemption for gains on qualifying startup stock held 5+ years.
Frequently asked questions
- What is Section 1045 Rollover (QSBS)?
- Section 1045 lets QSBS holders who haven't held shares for 5 years (and thus can't yet exclude gains) sell and reinvest proceeds in other QSBS within 60 days — gain is deferred and the holding period from the original investment tacks. Critical exit-planning tool: lets you sell early without losing §1202 eligibility on the rolled portion. Strict 60-day window; coordinate with tax counsel before selling.
- Why is Section 1045 Rollover (QSBS) important for startups?
- Section 1045 Rollover (QSBS) is a tax concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does Section 1045 Rollover (QSBS) belong to?
- Section 1045 Rollover (QSBS) is a Tax term in the StartupCFO finance glossary — alongside other tax concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about Section 1045 Rollover (QSBS)?
- Beyond this definition, see the related tax terms below, or explore StartupCFO's insights and tools that put Section 1045 Rollover (QSBS) in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
Got a finance question that needs more than a definition?
Talk to a real CFO. 30 minutes, no contract, free.
