Practical legal guidance on QSBS (Section 1202), equity compensation, startup formation, financing, and Washington State tax issues for founders, investors, and startup employees.
In PLR 201636003 the IRS ruled that stock can be QSBS without formal stock certificates — ownership is a matter of economic substance. Here's what the ruling holds, and what it carefully didn't decide.
QSBS is a fact-intensive benefit. The IRS doesn't take your word for it. Here's what your documentation needs to cover.
IP26-645 submitted 511,408 signatures on July 2 — nearly double the requirement. What the repeal initiative does, the November 3 timeline, the two-year constitutional lock if it passes, and why founders should keep planning as if the 9.9% tax takes effect.
Washington's 30-day safe harbor makes you a nonresident — it doesn't change your domicile. Long-term stock gains are allocated by domicile at the time of sale, so the safe harbor alone won't protect your exit.
Part-year residents face a two-part calculation under ESSB 6346 — and the $1M standard deduction prorates by income, not days. How §§406 and 315 actually work, with examples.
Julian Robertson's New York residency audit came down to just four disputed days and $26.7M. Here's why documentation, not legal arguments, wins residency cases—and what it means for Washington founders before the 2028 income tax.
An announcement doesn't establish domicile — conduct does. What the Derek Jeter and Tom Golisano tax fights teach Washington residents planning an exit before 2028.
A repeal initiative is likely headed to the November 2026 ballot — but the 9.9% tax remains law, effective 2028. The planning playbook for Washington founders, investors, and high earners.
Section 1202 uses tax basis for the company's qualification cap and FMV for the shareholder's exclusion cap. Confusing the two costs founders money. The distinction, cleanly.
Angels investing on SAFEs are the most QSBS-exposed investors on the cap table and the least protected. A one-page side letter with an annual certification fixes it.
