QSBS
Exit Optimization
For a corporation, tax is not just a compliance cost. It affects your cost of capital and, eventually, your valuation. Entity selection, funding rounds, and the final exit each carry tax consequences for the company and its shareholders, and decisions made early are hard to unwind later.
Our corporate tax practice covers that whole lifecycle. We look for the tax assets already sitting in your cap table, such as Section 1202 Qualified Small Business Stock (QSBS), and structure your operations across states and international jurisdictions so less of the company's value goes to tax.
How we deliver this service.
A rigorous, phase-driven process ensures nothing is missed and every position is defensible.
Entity Architecture Audit
We review your current legal structure (C-Corp, S-Corp, Partnership) for tax leakage and readiness for an eventual exit.
Strategic Modeling
We model alternative structures to balance operational flexibility against tax-efficient movement of capital.
Nexus & Jurisdictional Review
We review your physical and economic activity in every state to find where you have nexus, before a state finds it for you.
Tax Credit Identification
We identify applicable federal and state incentives, including R&D credits, investment credits, and local hiring offsets.
Implementation & Election
We coordinate the filing of all required IRS elections (S-elections, Section 83(b), etc.) to lock in the chosen positions.
Governance & Maintenance
We maintain your tax provision and compliance so the structure holds up under audit and funding due diligence.
Exit Strategy
Zero-percent capital gains on exit.
Qualified Small Business Stock (QSBS) is the biggest prize in startup tax planning. Under IRC § 1202, shareholders of qualifying C-corporations can exclude up to 100% of their capital gains on sale, capped at $10M or 10x their basis. Keeping that eligibility means passing strict 'active business' and 'asset' tests from day one.
We monitor and certify your QSBS status annually, and we review every funding round and pivot for anything that could break it. For your shareholders, the difference between a taxed and untaxed exit can run to millions.
Strategy focus: Section 1202 eligibility audit, permanent asset testing, 'Active Business' monitoring, and pre-exit compliance certification.
Tailored for every client profile.
Incentive Strategy
R&D credits that survive an audit.
If you are building software, hardware, or new processes, you are likely eligible for the R&D Tax Credit (Section 41). For early-stage companies with no income tax to offset, these credits can often be applied against payroll tax (Section 3111), which puts cash back in the business while you are still burning it.
We prepare the R&D Credit Study that IRS scrutiny demands. We map your engineering activity to the Four-Part Test of Section 41 so every dollar of research you claim is quantified and documented.
Incentive focus: Section 41 R&D Credits, Section 3111 payroll tax offsets, state-specific incentives, and technical project documentation.
Corporate Governance
Tax provisions your auditors will accept.
As your company moves toward an IPO or institutional exit, accurate tax reporting on your financial statements stops being optional. We handle the calculations required under ASC 740 (Accounting for Income Taxes), including deferred tax assets (DTAs), valuation allowances, and uncertain tax positions (FIN 48).
We sit between your tax strategy and your external auditors, documenting the tax provision to the standard they expect so your financial statements reflect the company's real tax-adjusted position.
Governance focus: ASC 740 provision preparation, FIN 48 uncertain tax positions, DTA/DTL reconciliations, and audit-ready workpapers.
Planning a corporate exit?
An ad-hoc legal setup costs real money at valuation time. Get the structure right well before a buyer starts asking questions.
Specific deliverables, precisely documented.
“Tax is an operating decision, not an afterthought. We keep your corporate structure efficient and investor-ready at every stage.”
Technical clarifications.
Answers to the most frequently asked questions about how this service works in practice.
There is no default answer. C-Corps are required for VC funding and QSBS eligibility, but they carry double taxation. S-Corps avoid double taxation but have strict ownership limits. We model both paths against your 5-year exit goal.
Section 1202 is a federal tax incentive that lets founders and early investors in qualifying corporations exclude up to $10M of gains from federal tax. No other benefit in startup tax planning comes close.
Yes. Early-stage companies with under $5M in gross receipts can often apply up to $500k of R&D credits against their employer-side social security and medicare taxes, saving cash before they are profitable.
Nexus is a connection to a state that gives it the right to tax you. Employees, remote contractors, or crossing a sales threshold in a state (Economic Nexus) can all trigger filing requirements.
IPO readiness takes years of properly prepared tax provisions (ASC 740), documented nexus compliance, and an entity structure that holds up under audit. We build that record so investors and auditors find what they expect.
Related services.
Two Tax Systems, One Team
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