Understanding the New OBBBA Rules: How Startups Can Benefit from QSB Stock

ARTICLE | October 06, 2025

For entrepreneurs and investors who are focused on building scalable businesses, the “One Big Beautiful Bill Act” (OBBBA) offers an exciting development that can potentially turn equity stakes into significant tax savings. In particular, founders and early-stage investors who hold qualified small business (QSB) stock may find that the enhancements introduced under the OBBBA bring even greater opportunities for reducing or deferring capital gains taxes. These updates not only help startup owners better position themselves for exits but also broaden the appeal of investing in growth-oriented businesses. In this article, we explain what QSB stock is, how the new OBBBA rules increase the benefits for eligible shareholders, and why it may be valuable for some startups to incorporate (or convert) to QSB corporations. We will also discuss how the gain exclusion and rollover provisions can unlock long-term tax advantages under the new law.

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