Use this four-page checklist to identify Section 1202 qualification questions and the records needed to evaluate them. Updated October 2, 2026, it covers acquisition and issuance dates, holding periods, gain limits, business requirements, and transaction traps. It is an issue-spotting aid, not a certification of eligibility.
QSBS Records Worksheet for Startup Founders
What records should a founder keep for a QSBS review?
Organize records showing how you acquired the shares, the company’s tax status and financial position, its business activities, any repurchases, and your ownership and sale history. Keep a separate index for each issuance or acquisition lot. Give the reviewer both the supporting documents and a list of missing or conflicting facts.
Section 1202 tests different facts at different times. The evidence needed for an issuance-date test is not necessarily enough for a requirement that continues during the holding period. Use the eligibility checklist for those distinctions and the complete QSBS guide for context.
Start with one lot
| Field | Entry |
|---|---|
| Issuing company’s legal name | ____________________ |
| Shareholder / taxpayer to be reviewed | ____________________ |
| Share class and number of shares | ____________________ |
| Issuance date shown in company records | ____________________ |
| Acquisition date and holding-period analysis | ____________________ |
| How acquired: purchase, services, exercise, conversion, transfer, or other | ____________________ |
| Amount paid or property contributed | ____________________ |
| Prior transfers, exchanges, or rollovers | ____________________ |
| Proposed sale date and lots involved | ____________________ |
| Reviewer and date of review | ____________________ |
Do not treat an unsigned draft, certificate date, or cap-table entry as a substitute for reconciling what actually happened.
Gather the evidence
| Evidence category | Documents to request | Person responsible | Status / file location |
|---|---|---|---|
| Formation and tax classification | Formation records; federal classification and election history; relevant returns | ______ | ______ |
| Stock issuance | Signed purchase or grant documents; board approvals; ledger entries; payment evidence | ______ | ______ |
| Equity compensation, if applicable | Exercise records; vesting terms; relevant election copies and filing evidence | ______ | ______ |
| Gross assets | Historical and issuance-date financial records; supporting tax-basis calculations; financing proceeds and contributed-property records | ______ | ______ |
| Business activity | Contracts; product descriptions; activity changes; records supporting asset use and relevant cash or investment treatment | ______ | ______ |
| Repurchases | Buyback agreements; dates; amounts; counterparties; valuation support | ______ | ______ |
| Transfers and conversions | Transfer documents; conversion terms; predecessor ownership records; relevant tax analysis | ______ | ______ |
| Shareholder calculations | Basis records; prior sales of the issuer’s shares; prior exclusion calculations; pass-through ownership records if relevant | ______ | ______ |
| Sale and reporting | Sale agreement; closing statement; payment schedule; return workpapers | ______ | ______ |
The evidence categories reflect the original-issuance, company, asset, redemption, shareholder, and transfer questions in Section 1202. Which documents are necessary depends on the transaction; this table is an organizational starting point.
Track issues instead of filling gaps with assumptions
| Unresolved question | Why it matters | Document or analysis needed | Owner | Target date |
|---|---|---|---|---|
| ____________________ | ____________________ | ____________________ | ______ | ______ |
| ____________________ | ____________________ | ____________________ | ______ | ______ |
| ____________________ | ____________________ | ____________________ | ______ | ______ |
For example, a founder may have a purchase agreement but no evidence of payment, or a current balance sheet but no supporting issuance-date calculation. Mark the gap and request the underlying records. Do not label the file complete merely because a company letter says the shares qualify.
Maintain the file
- Assign someone to keep the index current and record where originals are held.
- Save dated versions of calculations and identify who prepared them.
- Revisit the file after financings, repurchases, changes in activity, transfers, and proposed sales.
- Retain source documents alongside any company confirmation or adviser memorandum.
- Keep restricted access to financial and ownership records; send documents through an agreed secure channel.
- Ask the tax adviser to set retention periods before disposing of records. The IRS explains that retention depends on the event and how long the record remains needed to support a return. IRS recordkeeping guidance.
Before the review meeting
Bring the index, relevant documents, proposed transaction timeline, and unresolved-issues list. Identify whether you need help obtaining company facts, analyzing eligibility, calculating a possible exclusion, or coordinating a transaction. Those are different tasks.
For a first contact, provide a brief nonconfidential description. Wait to share confidential transaction details until the firm’s intake and engagement arrangements are in place.
This worksheet is for general education and organizing a professional review. It is not an eligibility opinion or individualized legal or tax advice.