The key insight this week
What if I told you that many shareholders in young (and not-so-young) startups could potentially reduce the capital gains tax on their equity by 50%? Okay, how about 75% — or even eliminate capital gains completely?
Welcome to the wonderful world of the Qualified Small Business Stock exclusion.
There are over 6,000 US companies in the early stages of VC (pre-seed, seed, and Series A) that qualify for this exemption currently using Carta. But even some companies on their Series D round and beyond still qualify.
Nothing comes completely free, of course. There are hoops to jump through when it comes to qualifying for this preferential tax treatment, including the initial assessment of eligibility and then an actual attestation letter once eligibility is confirmed. As part of Carta's 409A valuations process, our team actually completes the initial assessment for all companies.
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Peter Walker
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. © 2026 Carta. All rights reserved. Reproduction prohibited.
