U.S. Treasury Data, 2012-2022
Who Actually Uses It
These are the people who took the risk. Founders who spent years building something. Employees who took below-market salary for equity. Investors who wrote checks when nobody else would.
75%
used it exactly once in 11 years
One exit. One reward. Only 6% claimed it five or more years.
$67,820
75th percentile annual exclusion
The typical meaningful QSBS exit. Median is just $2,810, pulled down by micro-claims.
2.55%
of all capital gains in 2021
QSBS is a rounding error in total capital gains.
Who QSBS actually helps
Senior Engineer
An engineer sells qualifying shares held for six years, realizing $40K of gain after basis.
First-time Founder
A founder sells qualifying shares held for eight years, realizing $2M of gain after basis.
Early Employee
An early employee sells qualifying shares held for six years after exercise, realizing $150K of gain.
Seed Investor
An investor sells qualifying shares for $200K after seven years, with $25K of basis and $175K of gain.
Hypothetical comparison at a flat 13.3% rate, assuming qualifying stock acquired September 28, 2010 through July 4, 2025 and unused exclusion capacity. California does not allow the QSBS exclusion; its modeled tax is the “without exclusion” amount. Actual tax depends on income and other rules — try the calculator.
How large is a typical QSBS exclusion?
Annual exclusion amount by percentile. 90% of claimants exclude less than $591K.
Source: Treasury OTA WP-127, Table 1. Percentiles of annual individual QSBS exclusion claims, 2012-2022.
Distribution data: U.S. Treasury OTA Working Paper 127, January 2025. Archetype examples are illustrative, based on typical QSBS claim profiles.
The other 13%: trust claims
$6.65 billion
Trust QSBS exclusions in 2021 — 13% of that year's total, up from nearly nothing in 2012. Related nongrantor trusts can each take a separate per-issuer cap.
That stacking is the real top-end problem. It is not an argument for taxing the median $2,810 individual claim. See the reform proposal.
Source: Treasury OTA WP-127, 2021 trust/estate claims.