26 U.S.C. § 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.

Pub. L. 85–866, title I, § 57(a)Sept. 2, 195872 Stat. 1645 Pub. L. 94–455, title XIX, § 1901(b)(3)(F)Oct. 4, 197690 Stat. 1793(Added , , ; amended , , .)

Editorial Notes

References in Text

Pub. L. 85–699Aug. 21, 195872 Stat. 689 section 661 of Title 15The Small Business Investment Act of 1958, referred to in cl. (1), is , , , which is classified principally to chapter 14B (§ 661 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Amendments

Pub. L. 94–4551976— substituted “an ordinary loss” for “a loss from the sale or exchange of property which is not a capital asset”, each time appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 1976 Amendment

Pub. L. 94–455Dec. 31, 1976section 1901(d) of Pub. L. 94–455 section 2 of this titleAmendment by applicable with respect to taxable years beginning after , see , set out as a note under .

Effective Date

Sept. 2, 1958section 57(d) of Pub. L. 85–866 section 243 of this titleSection applicable with respect to taxable years beginning after , see , set out as an Effective Date of 1958 Amendment note under .