Architecture

How the decoder works —
privacy, formulas, server.

Your QSBS inputs are sensitive financial data. The decoder is engineered to keep them on your machine and reduce the server-side footprint to nothing that could identify a specific transaction.

Last verified May 2026

Privacy promise

What stays in your browser

Server-side

What the server logs (aggregate only)

Standard page-view counts via Google Analytics 4 when consent is granted. The decoder does not emit any custom event that contains dollar amounts, dates, or state-of-residence combined with amounts. If GA is enabled, the dimensions are purely page URL + browser + locale + timezone.

The formula on the page

Every output number is reproducible from a closed-form formula. For any issuance:

1. Rule set

issuanceDate > 2025-07-04 ? "post-OBBBA" : "pre-OBBBA"

2. Hold-tier

yearsBetween(issuance, exit). Pre-OBBBA: 5y+ → 100%, else 0. Post-OBBBA: 3y → 50%, 4y → 75%, 5y+ → 100%, else 0.

3. Issuer qualifies

grossAssetAtIssuance ≤ $50M (pre) or $75M (post)

4. Per-issuer cap

max(statutoryFixedCap, 10× basis). Pre fixed = $10M; post fixed = $15M.

5. Eligible gain

min(gain, perIssuerCap)

6. Federal exclusion

eligibleGain × exclusionPct

7. Federal tax on unexcluded

(eligibleGain − exclusion) × 28% + overCapSlice × 23.8%

8. State add-back

per state conformity rule applied to federal exclusion

9. State tax

(federalUnexcludedGain + stateAddBack) × topMarginalRate

Statute pins

Every claim on a page links to its primary source: Cornell LII for IRC sections, eCFR for Treasury Regulations, congress.gov for the OBBBA bill text, IRS.gov for Form 8949 instructions and Publication 550, and state DOR portals or state legislatures for each state's QSBS conformity rule. Tax Adviser, McLane Middleton, Surgent CPE, and Baker Tilly are listed under the SUPPLEMENTARY heading on the sources page — they are secondary references, never load-bearing.

Validation fixtures

The decoder ships with a vitest test suite that reproduces six closed-form fixtures to the cent: a pre-OBBBA $8M gain in California, a post-OBBBA 75%-tier in Texas, a $30M gain capped at $15M in New York, a high-basis founder where 10× basis beats the fixed cap, an issuer disqualified by the $75M gross-asset ceiling, and a loss position routed to §1244. Every release runs these.

What it does NOT do

What the decoder does NOT do

Does not file your tax return. The decoder is informational only. A CPA, Enrolled Agent, or tax attorney files; we provide the math.
Does not store your data. Inputs disappear when you close the tab.
Does not predict litigation outcomes. No claim about whether the IRS will challenge a specific position.
Does not model AMT. §1202 has a permanent AMT-preference removal as of TCJA (2017) — we surface this on the relevant pillar pages but do not compute AMT.
Does not handle state-specific small-business exclusion overlays (e.g., Colorado's in-state QSBS subtraction, Ohio's small-business investor deduction). These show up as state notes; the decoder does not compute them.

Informational, not tax advice. Consult a CPA or Enrolled Agent before acting on a corrective distribution.