One Code section enables shareholders in a small business corporation to obtain an ordinary deduction for any loss recognized on a stock investment.

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This is true, as outlined in Code section 1244. Under this section, shareholders in a small business corporation may deduct up to $50,000 ($100,000 if married filing jointly) of losses incurred on the sale or exchange of stock in the corporation as an ordinary loss, rather than a capital loss. This can provide significant tax benefits for investors in small businesses.

One Code Section Enables Shareholders in a Small Business Corporation