QSBS Multipliers: The 10x Basis Rule & Stacking
QSBS Multipliers: The 10x Basis Rule & Stacking
Breaking the $15M ceiling: How to leverage adjusted basis and trust stacking for 9-figure exits.
Executive Summary
- The “Greater Of” Rule: The exclusion cap is the greater of $10M (or $15M under OBBBA) OR 10x the adjusted basis of the stock.
- Basis Packing: Contributing appreciated property (instead of cash) or making capital contributions can legally inflate your 10x multiplier cap.
- Stacking Strategy: Gifting stock to non-grantor trusts (INGs) creates separate taxpayers, effectively cloning the exclusion cap multiple times.
The “Sham Transaction” Risk
The IRS aggressively scrutinizes gifting strategies lacking economic substance. Stacking must be done well in advance of a liquidity event (binding LOI) to avoid the Assignment of Income Doctrine.
Mechanic: The Multiplier Effect
10x
Basis Limit
Unlimited
Stacking Cap
ING Trust
Structure
Audit
High Risk
Simulation: $50M Exit (Basis vs. Stacking)
Taxable Gain Comparison ($50M Gain)
| Strategy | Exclusion Limit | Effective For |
|---|---|---|
| Standard Cap | $10M / $15M | Early employees / Low basis |
| 10x Basis Rule | $20M ~ $100M+ | Large capital investors |
| Trust Stacking | Multiples of Cap | UHNW Founders (Pre-Exit) |
“The $15M cap is merely the floor. For sophisticated founders, the Adjusted Basis is the real lever for massive tax-free exits.”
Essential Resources
INTERNAL
BMT Playbooks