Secondary Sale Calculator
A secondary sale is a private transfer of your already-issued shares to a new buyer. Your net depends on holding period (short vs long-term), QSBS eligibility, state conformity, and whether the company right of first refusal is waived. This tool estimates gross proceeds, total tax, and what you keep.
How to use this calculator
- Enter the sale: Add share count sold, cost basis per share, sale price per share, and holding period.
- Enter your tax context: Select filing status, other income, and state.
- Flag QSBS and restrictions: Toggle QSBS eligibility and whether the company has ROFR or transfer restrictions.
- Review the numbers: See gross proceeds, tax owed, and net proceeds; a restriction flag surfaces if applicable.
Assumptions
| Assumption | Value |
|---|
| Federal LTCG | 0/15/20% (2026 est.) stacked above other income |
| QSBS cap | $10M per taxpayer (legacy rules) |
| State conformity | CA, NJ, PA, MS, AL don't conform to §1202 |
| Broker / platform fees | Not modeled |
| Installment treatment | Not modeled — single closing |
Frequently asked questions
What is a secondary sale?
It's a private sale of already-issued shares to a new buyer — typically a fund or existing investor — while the company is still private. Proceeds go to the seller, not the company.
Do I need company approval to sell?
Almost always. Most private companies have a right of first refusal (ROFR), transfer restrictions in the stockholders' agreement, and board approval requirements. Selling without approval can void the transfer.
Does QSBS still apply on a secondary sale?
Yes, if you personally meet the §1202 requirements: held the stock for more than 5 years, acquired it at original issuance, and the company met the gross-asset test at issuance. Gifted stock can preserve QSBS in some cases.
How is the tax on a secondary different from an exit?
The tax mechanics are identical — capital gain (long or short term), NIIT, state tax, and QSBS exclusion if eligible. The main differences are pricing (secondaries often trade at a discount to preferred) and transfer approval.
What is a right of first refusal?
ROFR means the company (and sometimes existing investors) can match any third-party offer before you can sell to that buyer. It doesn't block the sale; it delays it and can redirect the buyer.
Do I owe tax if the buyer pays me over time?
The IRS installment method may let you spread the gain over years, but many secondaries close in cash. This tool models a single closing.
What about tender offers?
Company-sponsored tender offers are the cleanest form of secondary — the company sets the price, handles approvals, and often centralizes tax reporting. Same tax math applies.
How is basis calculated for exercised options?
If you exercised ISOs or NSOs, basis is strike price + any ordinary income you already recognized (e.g., NSO bargain element or ISO disqualifying disposition).
Does this include broker or platform fees?
No. Common secondary platforms charge 1–5% in fees or spread. Subtract those from net proceeds separately for a full picture.
Is this tax advice?
No. This is an illustrative planning estimate using 2026 estimated brackets and is not tax, legal, or investment advice.
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