The U.S. has no large-shareholder category
United States tax law draws no line between a controlling shareholder and a small retail investor. There is no ownership percentage or holding value at which a share sale suddenly becomes taxable; every shareholder reports gains on Schedule D and Form 8949 on the same terms. What changes the outcome is the character of the stock and how long it was held, not the size of the stake.
The one exclusion that does turn on the company is Section 1202 qualified small business stock. Stock acquired at original issue from a qualifying C corporation and held for the required period can have a share of the gain excluded from tax, capped at the greater of a dollar limit or a multiple of basis. The exclusion percentage, the dollar cap and the holding requirement have all been amended by statute, so they are editable fields here rather than fixed numbers.
Whatever is not excluded is taxed at the long-term rate if held over a year, or at the ordinary rate if not, and the net investment income tax can apply once modified adjusted gross income passes a statutory threshold. Gain properly excluded under Section 1202 is not net investment income. Figures are on a 2026 basis; confirm current rules in the Form 1040 and Schedule D instructions.
This is an estimate, not a filing position. QSBS qualification is fact-intensive, and the gross asset test, active business requirement, redemption rules, state conformity and AMT treatment all matter. Confirm eligibility with a CPA or tax attorney before relying on the exclusion.
Frequently asked questions
No. The percentage you own does not create or remove a tax. Holding period and whether the stock qualifies under Section 1202 are what change the rate.
Up to the greater of a dollar cap or a multiple of your basis in the stock, per issuer. Anything above that cap is taxed as an ordinary capital gain.