Which provision could best be justified as encouraging small business?
A)Ordinary loss allowed on § 1244 stock.
B)Percentage depletion.
C)Domestic production activities deduction.
D)Interest deduction on home mortgage.
E)None of the above.

Question

Quizplus · Accepted Answer

The provision of allowing ordinary loss on § 1244 stock encourages small businesses by providing tax relief to individual investors in small businesses. This provision allows individuals to deduct up to $50,000 of ordinary losses in a small business investment per year ($100,000 for married couples filing jointly). This can incentivize investment in small businesses, which often struggle to raise capital compared to larger companies.

Which Provision Could Best Be Justified as Encouraging Small Business