Losses on small business investment company stockIf—
a loss is on stock in a small business investment company operating under the Small Business Investment Act of 1958, and
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 Pub. L. 85–866, title I, § 57(a)
, Sept. 2, 1958
, 72 Stat. 1645
; amended Pub. L. 94–455, title XIX, § 1901(b)(3)(F)
, Oct. 4, 1976
, 90 Stat. 1793
References in Text
The Small Business Investment Act of 1958, referred to in cl. (1), is Pub. L. 85–699, Aug. 21, 1958, 72 Stat. 689, as amended, 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 section 661 of Title 15 and Tables.
1976—Pub. L. 94–455 substituted “an ordinary loss” for “a loss from the sale or exchange of property which is not a capital asset”, each time appearing.
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