Home / Learn / Attestation letter checklist
What a QSBS attestation letter should include A QSBS attestation letter is a written analysis, usually from the company’s outside counsel or CPA, concluding which share issuance dates appear to qualify as QSBS and why. A complete letter states a cutoff date, documents each statutory test with the company’s own financial records, and explains its assumptions. Use this checklist to review a letter or to ask your company for one.
Print checklist See the sample letter
1. Who it comes from and what it concludes Issued by outside counsel or a CPA firm On letterhead, signed, dated, and addressed to the company (often its general counsel). A clear cutoff date States that shares issued from inception until a specific date appear to be QSBS. This is the single most important line for shareholders. The exclusion cap and holding period Greater of $10M or 10x basis with a five-year hold for stock issued on or before July 4, 2025. For later stock: $15M (indexed), $75M gross asset limit, and 50/75/100% at 3/4/5 years. Limits on reliance Says the advice is general, may not apply to a particular taxpayer, and that shareholders should consult their own advisors.
2. Facts it should document Formation and C corporation status State and date of incorporation, and confirmation the company has filed as a C corporation since formation. What the business does Products, how revenue is earned, and which functions regulated partners perform versus the company. Gross assets by period Year-end totals at minimum, and monthly balance sheets around financings if the threshold was close. Valuations 409A reports by date and pre-money valuations by financing round, used for the working capital analysis. Subsidiaries and outside holdings Any stock or securities in other companies and any real estate. Redemption history Whether the company repurchased shares, other than on employees’ separation.
3. Each statutory test, analyzed Original issuance Shares acquired directly from the company for money, property, or services. Notes that transferred shares may lose QSBS status. Redemptions Related-party purchases within 2 years before or after issuance (de minimis: over 2% and over $10,000) and significant redemptions within 1 year (over 5%), with the service-termination exception. Gross assets test $50M (or $75M after July 4, 2025) at issuance, including amounts received in the issuance itself. Explains any position taken if the threshold was approached between financings. Qualified trade or business Why the business isn’t in an excluded field and why its principal asset isn’t employees’ reputation or skill, supported by IRS guidance. 80% active business test At least 80% of assets used in the business for substantially all of the holding period, including subsidiaries owned over 50%. 10% limits Stock or securities of other companies and non-business real estate each at or below 10% of asset value. Working capital Two-year safe harbor, then the 50% limitation, compared year by year against fair market value. Year-by-year exhibit A table showing assets, valuation source, working capital limit, excluded assets, and whether the 80% test was met each year.
4. What the company has to provide to its counsel Certificate of incorporation Plus any conversion or reincorporation documents. Federal corporate returns Form 1120 for each year in the period covered. Financial statements and monthly balance sheets Especially around each financing. 409A valuation reports Every report in the period. Financing history Dates, amounts, and pre-money valuations for each round. Cap table and redemption records Including any repurchases and the reason for each. Subsidiary and investment statements Balance sheets for any entity holding outside investments.
5. What the letter won’t cover: your part Your issuance date For options, the exercise date. For RSUs, the settlement date. For early exercise, the purchase date and your 83(b) filing. Your basis and holding period What you paid, and whether you’ve held more than 6 months (rollover) or 5 years (full exclusion). How you hold the shares Individually, in a trust, or through an entity, since that affects who can claim the exclusion or elect a rollover. Your state Some states, including California, don’t follow federal QSBS treatment.
How to ask your company for one “Hi [name], I’m planning for a potential sale of my shares. Does the company have a QSBS attestation or information letter from outside counsel stating which issuance dates appear to qualify? If so, could you share a copy? If not, is the company planning to obtain one? Thanks.”
General information, not legal or tax advice. Last reviewed November 2026.