Secondary Sale Tax Calculator
Secondary sales let employees sell pre-IPO equity outside formal tender offers — often to specialised secondaries funds. Tax treatment mirrors regular stock sales but pricing, basis tracking, and §83(b) elections add complexity.
Why Companies Allow Secondary Sales
Liquidity for employees retains talent without IPO pressure. Top companies (Stripe, SpaceX, Anthropic, Databricks) run regular secondary programs at 12-24 month intervals. Specialised funds (Industry Ventures, Tiger Global, Founders Fund Secondary) buy at private valuations.
Common Restrictions
Most pre-IPO secondaries face: company right of first refusal (ROFR), board approval, transfer restrictions for vesting shares, and stockholder approval thresholds. Lawyer review before signing a purchase agreement is standard.
Pricing Below Primary Rounds
Secondary buyers pay 10-25% discount to most recent primary round price. The discount reflects illiquidity (cannot easily re-sell), lack of info rights, and the buyer's risk on between-round valuation movement. Tender offers (company-run) often match primary pricing.
Source: IRS Publication 550 Investment Income; SEC Rule 144 Secondary Sales. Last updated: May 2026.