When small business stock losses can be ordinary
Article Abstract:
Section 1244 permits the disposition of small business stock to be treated as an ordinary loss provided that the taxpayers trying to qualify for such a treatment meet three requirements. First, the stock must be issued by a small business corporation. Second, they must be issued specifically for money or property. Lastly, more than half of the corporation's aggregate gross receipts must not have come from certain sources including royalties, interest or interests, for the five tax years immediately preceding the loss. Taxpayers who have qualified for the ordinary loss treatment must also comply with Section 1244's recordkeeping requirements. Inadequate or improper documentation of Section 1244 compliance can lead to the treatment of loss from stock disposition as a capital loss.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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Organization costs may be amortized if election is made
Article Abstract:
Sec. 248(a) permits corporations to elect for the amortization of organizational expenditures over a minimum of 60 months although these costs may be capital in nature. The amortization commences with the month when the corporation starts business. The election must be filed by the due date for a timely filed return, excluding extensions, and must be made by attaching a statement to the return. The statement must indicate the amount and description of the relevant expenditures, the date the expenditures were spent, the month in which the corporation started business and the number of months over which amortization is elected. Once a period is chosen, it cannot be revised and must be observed for all following years.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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