26 U.S.C. § 1242
§ 1242. Losses on small business investment company stock
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Added in 1958 by the Public Law 85-866. Last changed October 4, 1976 by the Tax Reform Act of 1976.
Every change, newest first (2)
- October 4, 1976Tax Reform Act of 1976
- September 2, 1958Public Law 85-866 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
If—
a loss is on stock in a small business investment company operating under the Small Business Investment Act of 1958, and
such loss would (but for this section) be a loss from the sale or exchange of a capital asset,
then such loss shall be treated as an ordinary loss. For purposes of section 172 (relating to the net operating loss deduction) any amount of loss treated by reason of this section as an ordinary loss shall be treated as attributable to a trade or business of the taxpayer.