Losses on qualifying small business C-corp stock deduct as ORDINARY (not capital) — up to $50K single / $100K MFJ per year.
IRC §1244 lets an ORIGINAL shareholder of a domestic C-corp (small business — gross capital <$1M when stock issued) deduct losses on that stock as ORDINARY (not capital), up to $50K single / $100K MFJ per year. Excess is capital loss. Ordinary losses offset W-2 wages, spouse's income — vastly more valuable than the $3K/yr capital loss cap. Applies only to individuals/partnerships that were the original issuee. No election required — just document eligibility at issuance. Pairs with §1202 QSBS on the upside (same stock, symmetric treatment).
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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.