Document §1244 status at formation — if startup fails, up to $100K ordinary loss (offsets W-2) instead of $3K/yr cap loss.
IRC §1244 lets shareholders of domestic small business corporations (aggregate contributed capital <$1M) treat losses on stock as ORDINARY (offsets W-2, business income, unlimited) instead of capital ($3K/yr limit). Cap: $50K single / $100K MFJ per year. Requirements: (1) domestic C-corp OR S-corp, (2) issued for cash/property (not services), (3) corp active-business for 5 yrs preceding loss with >50% gross receipts from non-passive sources. MUST be documented at formation via corporate resolution — most founders miss this and lose access retroactively.
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Multiply the $10M §1202 exclusion across multiple trusts.
4% corporate tax + 0% capital gains for bona fide residents.
Stack the $500K primary-home exclusion on top of a 1031 deferral.
Convert Traditional to Roth during sabbaticals or business-loss years.
Capitalize property taxes and interest on undeveloped land.
Deduct now, control forever, employ heirs.
Ordinary loss (not capital loss) on failed small biz — up to $100K.
Buy leveraged real estate inside your IRA — tax-deferred or tax-free.