Equity Tender Offer Tax Calculator
Tender offers let employees sell pre-IPO equity at private valuations — but tax treatment varies wildly based on holding period, equity type (ISO/NSO/RSU), and state of residence. This calculator estimates net proceeds after federal, state, and NIIT.
How Tender Offer Tax Works
Tender offers sell pre-IPO equity to investors at private valuations. The sale triggers tax: short-term (held under 1 year — ordinary income rates up to 37% federal + state), long-term (1+ year — 0/15/20% federal + state), or QSBS-excluded if §1202 requirements are met.
QSBS Exclusion Worth Knowing
IRC §1202 excludes up to $10 million or 10x basis (whichever is greater) of QSBS gains from federal tax. Requirements: C-corp shares, held 5+ years from issuance, company had under $50M gross assets when shares acquired. Verify QSBS status before the tender — once shares are sold, this benefit is gone.
State Tax Variation
California taxes capital gains at full ordinary rates (up to 13.3%). New York at 10.9%. Texas, Florida, Washington, Nevada at 0%. State tax often equals or exceeds federal LTCG — choose state of residence strategically if relocation is feasible.
Source: IRC §1202 Qualified Small Business Stock; IRC §1411 Net Investment Income Tax. Last updated: May 2026.