On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA” or “the Act”) became law and ushered in the most significant changes to the Qualified Small Business Stock (“QSBS”) regime in more than a decade. These changes—codified under Internal Revenue Code § 1202—apply only to stock acquired after July 4, 2025. Stock issued on or before that date remains subject to the pre-OBBBA rules . From both an estate planning and a corporate tax/M&A perspective, the legislation creates new opportunities and new traps, all of which hinge on careful timing, documentation, and structuring.

One Big Beautiful Bill Act: Three Key QSBS Changes

The OBBBA modifies QSBS in three central ways. First, it introduces a tiered gain-exclusion system based on holding period. For QSBS acquired after July 4, 2025, a

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