Section 1244 Stock
- Shares issued by qualified small corporations that enable owners to claim up to $50,000 in losses, or $100,000 for joint filers, as ordinary losses rather than capital losses under Section 1244 of the Internal Revenue Code
- Due to the downturn, the couple was able to deduct the loss on their Section 1244 Stock from their income.
- He used Section 1244 Stock to protect himself, knowing he could treat a potential loss as an ordinary loss.
- In tax preparation, it’s important to note whether any losses come from Section 1244 Stock as the deduction rules are different.