Does Halcyon stock qualify?
§1202 QSBS requires the company to have been a domestic C-corporation at issuance, with gross assets under $50M at the time of issuance, in a qualifying trade or business. Tech SaaS, AI, fintech, cybersecurity, and most software businesses qualify. Healthcare services, legal services, consulting, financial services, farming, mining, and hospitality do not.
What to document
Request a QSBS attestation letter from Halcyon's finance or general-counsel team. Keep the cap table history, your grant / exercise paperwork, and the gross-asset disclosures from the time you acquired your stock. Audit risk is non-trivial on QSBS claims; the documentation has to be assembled before any sale, not reconstructed after.
The 5-year clock
The clock starts at acquisition: for ISO shares, the exercise date; for RSU shares, typically vest date (though QSBS on settled RSUs is an evolving area); for early-exercised shares with 83(b), the early-exercise date. For Halcyon employees, the practical question is whether your acquisition date plus 5 years lands before or after the expected liquidity event.
Frequently asked
- Is Halcyon stock publicly tradable?
- No. Halcyon is a late-stage private company. Shares can only be transferred through private sales subject to the company’s transfer restrictions; no active secondary market has been confirmed publicly.
- When should I exercise ISOs at Halcyon?
- The answer depends on the current 409A, your own AMT capacity, and the probability of a liquidity event in the next 12-24 months. Model AMT before any exercise larger than $50k of bargain element.
- Does QSBS apply to my Halcyon stock?
- Potentially, if Halcyon was a C-corporation at issuance with under $50M in gross assets, and you acquired the stock at original issuance (or via ISO/NSO exercise) and will hold it five years from acquisition. Request a QSBS attestation letter from the company before you need it at sale.
- Should I participate in a Halcyon tender offer?
- Usually yes for some portion, to reduce concentration risk. The full-stack question is: what percentage of your net worth is in Halcyon? What's the tender price versus 409A? What's your tax rate on the gain? Run the secondary-sale calculator before responding.