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Unformatted text preview: RE: Section 1244 Section 1244 stock are used by corporation’s regarding the qualifications of the rules. The corporations will at the initial stock issuance specify for section 1244. Corporations can still go back and change it to a section 1244 later if it did not at the initial stock issuance. There are four conditional that must be met at the time of issuance and one at the time of loss to qualify for section 1244. First the corporation must be a small business corporation and the total amount of money or property received for stock cannot exceed $1 million. The stock must be issued in exchange for property or cash. The third qualification is the original owner of the stock at issuance is the only one allowed to claim the stock as section 1244 ordinary loss. “Last the stock can be common or preferred, permitted it was issued after July 18, 1984.” (Ellentuck, P. 181) During the year the loss is realized, the corporation must also pass the gross receipts test. The rule states, stock will not qualify under Section corporation must also pass the gross receipts test....
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This note was uploaded on 07/19/2011 for the course ACCT 401 taught by Professor Hawkens during the Spring '11 term at Lee.
- Spring '11