Public Law 119-73 (01/23/2026)

26 U.S.C. § 1243

Loss of small business investment company

In the case of a small business investment company operating under the Small Business Investment Act of 1958, if—
(1)
a loss is on stock received pursuant to the conversion privilege of convertible debentures acquired pursuant to section 304 of 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.

Pub. L. 85–866, title I, § 57(a)72 Stat. 1645Pub. L. 91–172, title IV, § 433(b)83 Stat. 624Pub. L. 94–455, title XIX, § 1901(b)(3)(F)90 Stat. 1793(Added , , ; amended , , ; , , .)

Editorial Notes

References in Text

Pub. L. 85–69972 Stat. 689section 684 of Title 15section 661 of Title 15The Small Business Investment Act of 1958, referred to in text, is , , , which is classified principally to chapter 14B (§ 661 et seq.) of Title 15, Commerce and Trade. Section 304 of the Small Business Investment Act of 1958, is classified to . 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”.

Pub. L. 91–1721969—Par. (1). substituted “stock received pursuant to the conversion privilege of convertible debentures” for “convertible debentures (including stock received pursuant to the conversion privilege)”.

Statutory Notes and Related Subsidiaries

Effective Date of 1976 Amendment

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

Effective Date of 1969 Amendment

Pub. L. 91–172section 433(d) of Pub. L. 91–172section 582 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date

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