Updated December 2025

When Does Your QSBS Holding Period Actually Start?

It depends on your stock type. For options, it starts when you exercise—not when you were granted the options. For RSUs, it starts when shares are delivered. For restricted stock with an 83(b) election, it starts at grant.

Most people get this wrong. They think their clock started years earlier than it did.

The Rules by Stock Type

Here's when your 5-year QSBS holding period begins:

Stock Type	Holding Period Starts	Common Mistake
Stock options (ISOs/NSOs)	Exercise date	Thinking it's the grant date
Restricted stock with 83(b)	Grant date	Not filing the 83(b) in time
Restricted stock without 83(b)	Vesting date	Assuming grant date counts
RSUs	Vesting/delivery date	Confusing with restricted stock
SAFE/Note conversion	Conversion date	Thinking it's the investment date
Direct purchase	Purchase date	—
Gift	Donor's original date	Not knowing to ask
Inheritance	Immediate qualification	—

The Mistake That Costs Millions

Here's what happens constantly:

A founder gets options in 2019. They exercise in 2023. In late 2025, they're selling the company and assume they've held for 6+ years.

They haven't. Their clock started in 2023. They need to wait until 2028.

If they sell in 2025, they lose the entire QSBS exclusion. On a $2M gain, that's roughly $475,000 in federal taxes they didn't need to pay.

The fix is simple: know your actual start date. The problem is most people don't check until it's too late.

Check Your Start Date

Enter your stock type and dates. We'll tell you exactly when your holding period started and when you'll qualify.

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Your Stock

Stock Type

How Acquired

Key Dates

Your holding period starts at EXERCISE, not grant. This is the #1 mistake people make.

Grant Date

Exercise Date *

Expected Sale Date *

Value

Cost Basis *

What you paid, or the value included in your income

Expected Sale Value *

Your Location

State of Residence *

Your state at time of sale determines tax treatment

What If You're Not There Yet?

If your qualification date is in the future, you have two options:

Wait.

Don't sell until after the date. Even if it means pushing back a deal.

Section 1045 rollover.

If you must sell early, you can defer (not exclude) the gain by reinvesting in another QSBS within 60 days. This is complicated—talk to a tax advisor.

There's no way to accelerate the clock. If you exercised in 2023, you're waiting until 2028. Period.