Section 1242: Losses on small business investment company stock
Internal Revenue Code
§1242. Losses on small business investment company stock
If—
(1) a loss is on stock in a small business investment company operating under the Small Business Investment Act of 1958, and
(2) 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.
(Added
Editorial Notes
References in Text
The Small Business Investment Act of 1958, referred to in cl. (1), is
Amendments
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date
Section applicable with respect to taxable years beginning after Sept. 2, 1958, see section 57(d) of