As a result, all QSBS gain exclusions and deferrals previously allowed under California law became invalid.

FORBES: California's State Tax Board Dims The Lights On Some Of Our Brightest Entrepreneurs

Beginning in 1993, California adopted its own standalone QSBS provisions dealing with exclusions, which generally mirrored existing federal law.

FORBES: California's State Tax Board Dims The Lights On Some Of Our Brightest Entrepreneurs

In 1998, California adopted its own standalone QSBS provision dealing with deferrals.

FORBES: California's State Tax Board Dims The Lights On Some Of Our Brightest Entrepreneurs

Federal income tax law provides for the exclusion or deferral of gain from the sale or exchange of qualified small business stock (QSBS).

FORBES: California's State Tax Board Dims The Lights On Some Of Our Brightest Entrepreneurs

More generous still, the exclusion grew to 100% for QSBS purchased after September 27, 2010 and before January 1, 2011 if held more than five years.

FORBES: Tax-Free In 2011: Qualified Small Business Stock