Do the benefits of Section 1202 (“QSBS”) and Section 1045 apply when investing through a partnership?

Generally, yes. 

There are certain requirements placed on partners that could exclude one or more partners from utilizing the benefits of the Sections 1202 or 1045 classification.

  • Partners must have been partners in the partnership at the point in time that the partnership made the equity investment in the company.
  • Corporate partners cannot utilize these benefits.

Additionally, the company stock must meet all of the requirements from Section 1202 to otherwise qualify as “small business stock.” This is irrespective of the investment being made through a partnership. 


AngelList and its affiliates are not tax advisors and do not provide tax advice. All decisions regarding the tax implications of your investments should be made in consultation with your independent tax advisor.

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