Secondary Share Sale Tax Calculator
Tender offers let private company employees sell vested shares before IPO/acquisition. Calculate your tax on the sale — LTCG if held >12 months, STCG if shorter. Includes NIIT and state tax.
| Gross sale proceeds | — |
| Cost basis | — |
| Total gain | — |
| Federal tax (LTCG or STCG or mixed) | — |
| NIIT 3.8% (if over threshold) | — |
| State tax | — |
| Total tax | — |
| Net proceeds to your bank | — |
Secondary tender offers let employees sell vested private company shares before IPO/acquisition. Tax treatment depends on share type and holding period: ISO qualifying disposition (2 yr from grant + 1 yr from exercise) = full LTCG. Standard hold (12+ months) = LTCG. Sub-12 month hold = ordinary income (STCG). Plus NIIT 3.8% if income over threshold + state tax.
Holding Period Matters
12+ months from acquisition = LTCG at 0/15/20% federal. Under 12 months = ordinary income at 10-37% (STCG). The difference can be 17 percentage points — on a $500K gain, that's $85K of tax saved by waiting 12 months. Plan tender offer participation around holding periods.
QSBS Exclusion
If shares qualify as Qualified Small Business Stock under IRC §1202 (company had less than $50M aggregate assets when shares were issued, AND you held shares >5 years, AND company is C-corp), you can exclude up to $10M (or 10× basis if greater) of gain from federal tax. Founders selling pre-IPO often qualify — massive savings. State treatment varies (CA does NOT honor QSBS).
Tender Offer Mechanics
Company-coordinated event where existing investors (or new buyers) purchase shares from employees. Sale price typically at the company's most recent 409A valuation or a small premium. Subject to company right of first refusal. Tender offers happen every 12-24 months at mature private companies. Pre-IPO often a final liquidity event before lockup.
Last updated May 2026. Sources: IRS Pub 550 Investment Income, IRS Form 8949.