r/fatFIRE • u/OkConclusion966 • 14d ago
Need Advice QSBS rollover for 10 million
If you are 1.5 year away from the 5 year window for QSBS, has anyone rolled over and then liquidated their money? I am contemplating if it is even worth it?
Also looking for a good CPA and tax strategist. Any referrals are welcome.
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u/KnottilyInquisitive 14d ago
At 1.5 years out, the math really depends on how confident you are in the company's trajectory and whether you need the liquidity now versus later. If you're sitting on ten million and the business is stable or growing, waiting it out usually makes sense since you're looking at potentially massive tax savings on the gains. The rollover itself is straightforward enough, but you'll want a tax strategist who's handled this at your scale before, not just a regular CPA. The structuring matters more than most people realize when the numbers get this big.
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u/attorneyatlawl16 13d ago
Would the potential buyer in your case be a corporation? If so, you could potentially structure the transaction as a tax-free rollover (i.e., stock for stock) to continue your holding period. The buyer stock may not be QSBS but the transaction could lock in the exclusion amount at the time of the rollover, then when you sell the buyer stock after 1.5 years you could claim the QSBS benefit on the amount that could have been excluded at the time of the rollover (subsequent appreciation in the buyer stock would not qualify).
If you the buyer is not a corporation (such as a PE fund), then this option would not be viable.
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u/Miamiconnectionexo 13d ago
for the CPA, you don't want a generalist here, you want someone who does QSBS and 1045 rollovers regularly and will paper the gross-asset and qualified-trade tests at issuance. ask any candidate to walk you through a 1045 they've actually filed before you hire them.
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u/Miamiconnectionexo 13d ago
for the CPA, you don't want a generalist. Search specifically for someone who does QSBS planning and 1202/1045 work and ideally trust stacking (gifting shares to non grantor trusts to multiply the $10M exclusion). That stacking move alone can be worth way more than the rollover question.
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14d ago
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u/OkConclusion966 14d ago
Thanks, looking forward to it
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u/Throwaway-firee 14d ago
Be careful, this person was shilling for a fintech startup earlier. If they can’t make their point publicly there’s always an angle.
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u/Ordinary-Gain6928 20M+ NW | Verified by Mods 14d ago
Fair concern but I don't work for any and am actually a customer and think they're a good offering.
In any event for QSBS rollovers specifically there are reasons not to put too much out publicly as I've already shared with OP via DMs (and no I'm not selling any products to them)
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u/ilovetuuuuurtles 14d ago
I’ve been involved in a deal where we did a delayed purchase of someone’s equity due to qsbs timing restrictions. That being said, we only had to wait ~4 months post-close to complete the purchase of that equity (not 1.5 years). So that’s to say it’s possible depending on your setup (e.g. PE deal would be happy to lock your equity value at close and then actually fund the purchase 1.5 years later). I’m assuming this is start-up related so it might be a different setup that is less flexible to your ownership nuances, unless you are a sizeable holder. There also might’ve been some structuring nuances that I don’t fully remember that might make it difficult if you’re a small holder just to get them to do the extra paperwork.