Section 1244 permits an investor to convert what would be a capital loss into an ordinary loss.

Question

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Section 1244 of the Internal Revenue Code allows investors to convert losses from the sale of small business stock into ordinary losses, which are more advantageous than capital losses. This applies to stock purchased directly from the issuing company, with a maximum capital investment of $1 million for individuals or $10 million for corporations.

Section 1244 Permits an Investor to Convert What Would Be