Under section 1244, shareholders of domestic small business corporations can deduct a loss on the disposal of 1244 stock as ordinary loss rather than capital loss. A deduction for capital loss is limited to $3,000 annually. Any excess capital loss has to be carried over to the next year. Nevertheless, ordinary loss under Section 1244 is deductible up to $50,000 for the individuals and $100,000 for joint returns.

How to qualify for Section 1244 stock?

To receive a tax benefit under Section 1244, a business must meet specific requirements for the insurance of small business stock, the stock itself, and the shareholders. To qualify the corporation’s equity may not exceed $1,000,000 at the time the stock was issued, the stock must be issued for money or property, and for five years preceding the loss the corporation generally must have derived more than half of its gross recipients from business operations and not from passive income.

To understand if you qualify for Section 1244 stock, speak to one of our attorneys by calling our toll free number (800) 603 – 3900

www.AmeriLawyer.com

Related Posts

Continue Reading

Business

IdentityTheft.Gov Upgraded To Better Assist Identity Theft Victims

The Federal Trade Commission's www.IdentityTheft.gov website has been updated making it easier for consumers to start the process of regaining...

Read More >>
Legal Services

What Triggers an IRS Audit and What To Do if Audited

What is an IRS Audit? What triggers an IRS audit is when the IRS has reason to suspect that the...

Read More >>
Business

Business Expenses and Building Business Credit

Creating a business is an American dream. Hard work and dedication may not be enough when starting your business.  you...

Read More >>
Assistance

How Can We Help?

Contact Us