My First Million
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Maximize tax-free gains on startup exit beyond the standard $10M QSBS limit
Startup founders expecting exits above $10M who can plan 5+ years in advance
5+ years (QSBS holding period requirement)What Success Looks Like
$30M+ in tax-free gains instead of $10M limit through strategic distribution to family members and trusts
Steps to Execute
Form C-Corporation and complete 83(b) election within 30 days
Gift shares early to family members (parents, siblings, spouse) to start their 5-year clocks
Set up irrevocable trusts for future children/beneficiaries
Transfer shares to each trust (each gets separate $10M limit)
Ensure each recipient holds shares for full 5 years before exit
Structure exit to maximize QSBS treatment for all shareholders
Checklist
Inputs Needed
- Estate planning attorney familiar with QSBS
- Tax advisor for gift tax implications
- Family members willing to be shareholders
- Business projecting $30M+ exit value
Outputs
- Potential tax savings of $5-15M+ vs single shareholder
- Complex shareholder structure requiring ongoing management
- Irrevocable gifts that cannot be unwound
Example
“Founder expects $50M exit. Gifts shares to parents, spouse, sibling, and sets up 2 trusts. Instead of $10M tax-free, potentially $60M+ tax-free across 6 entities, saving $12M+ in taxes.”
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