What happens to your holding period after a 1045 rollover?
It generally carries over. Time you held the original stock counts toward the holding period of the new stock for the Section 1202 exclusion. The new company still has to meet the active business requirement for at least your first six months as a holder.
Why this is the key benefit
If you sold at year 4, the new shares already carry four years. About one more year, in companies you chose, can bring you to five.
More than one rollover
If a company you rolled into is acquired early too, you can roll again. Each rollover has to meet every requirement on its own. Confirm with your advisor how the holding period applies across multiple rollovers in your situation.
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General information, not tax advice. Last reviewed November 2026.