Ordinary Vs. Capital Loss Dependent on type of property involved and type of transaction involved Losses on qualifying Sec. 1244 stock are treated as ordinary rather than capital loss($50,000 limitation or $100, 000 if filing MFJ)
Ordinary Vs. Capital Loss • Dependent on type of property involved and type of transaction involved • Losses on qualifying Sec. 1244 stock are treated as ordinary rather than capital loss($50,000 limitation or $100,000 if filing MFJ)
Qualification as Sec. 1244 Stock Must be issued and owned by an individual or partnershi Corporation must be domestic Stock must be issued for cash or property, not services
Qualification as Sec. 1244 Stock • Must be issued and owned by an individual or partnership • Corporation must be domestic • Stock must be issued for cash or property, not services
Qualification as Sec. 1244 Stock Corporation must not have derived 50 of gross receipts from passive income sources during the immediately preceding 5 tax years, and At the time stock is issued the amount of money and property contributed to both capital and paid in surplus may not exceed $1 million
Qualification as Sec. 1244 Stock • Corporation must not have derived > 50% of gross receipts from passive income sources during the immediately preceding 5 tax years, and • At the time stock is issued, the amount of money and property contributed to both capital and paidin surplus may not exceed $1 million