What requirements must be met for stock to qualify as Code Sec 1244 stock What are the tax consequences of meeting these requirements?

Qualifying for Section 1244 StockThe stock must be issued by U.S. corporations and can be either a common or preferred stock.The corporation's aggregate capital must not have exceeded $1 million when the stock was issued and the corporation cannot derive more than 50% of its income from passive investments.More items...

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Minutes of Special Meeting of the Board of Directors of (Name of...

Tennessee Minutes of Special Meeting of the Board of Directors of (Name of Corporation) to Adopt Stock Ownership Plan under Section 1244 of the Internal Revenue Code

Q: Who may call a special shareholders meeting if the bylaws do not address this issue?

Unless otherwise provided in the subsidiary holding company&#039;s charter, special meetings of the shareholders may be called by the board of directors or on the request of the holders of 10 percent or more of the shares entitled to vote at the meeting, or by such other persons as may be specified in the bylaws of the

Category:

Corporations - Minutes and Resolutions

State:

Multi-State

Control #:

US-1077BG

Format:

Instant download

Description

Section 1244 of the Internal Revenue Code is the small business stock provision enacted to allow shareholders of domestic small business corporations to deduct a loss on the disposal of such stock as an ordinary loss rather than as a capital loss, which is limited to only $3,000 annually. Normally, stock is treated as a capital asset and if disposed of at a loss, the loss is deducted as a capital loss. The general rule for net capital losses (losses that exceed gains) is that they are subject to an annual deduction limit of only $3,000. Any excess over $3,000 must be carried over to the next year. A loss on Section 1244 stock is deductible as an ordinary loss up to $50,000 ($100,000 on a joint return, even if only one spouse has a Section 1244 loss).

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How to fill out Minutes Of Special Meeting Of The Board Of Directors Of (Name Of Corporation) To Adopt Stock Ownership Plan Under Section 1244 Of The Internal Revenue Code?

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FAQ

The corporation can allow others to call a special meeting, such as the BoD Chair, CEO, or yes, shareholders.

Most special meetings involve director elections, which typically work pursuant to a less-restrictive plurality standard, rather than a majority standard.

Under Section 1244, an individual stockholder of a corporation can claim an ordinary (rather than capital) loss of up to $50,000 per year (or $100,000 for on a joint return) from the sale or worthlessness of Section 1244 stock. For most stockholders, an ordinary loss is much more beneficial than a capital loss.

Special meetings of the shareholders may be called for any purpose or purposes, at any time, by the Chief Executive Officer; by the Chief Financial Officer; by the Board or any two or more members thereof; or by one or more shareholders holding not less than 10% of the voting power of all shares of the corporation

The directors can call a special meeting at any time. Under Section 105 of the OBCA and Section 143 of the CBCA shareholders with at least 5 per cent of the issued shares can also requisition the directors to call a meeting of shareholders. At both annual meetings and special meetings, a director can be removed.

Section 1244 stock is a stock transaction pursuant to the Internal Revenue Code provision that allows shareholders of an eligible small business corporation to treat up to $50,000 of losses (or, in the case of a husband and wife filing a joint return, $100,000) from the sale of stock as ordinary losses instead of

Typically either the president or a majority vote of the board (or both) can call a special meeting. You need to give proper notice to members and, of course, you need a quorum to do business. The procedure should be spelled out in your bylaws.

Qualifying for Section 1244 StockThe stock must be issued by U.S. corporations and can be either a common or preferred stock.The corporation's aggregate capital must not have exceeded $1 million when the stock was issued and the corporation cannot derive more than 50% of its income from passive investments.More items...

Unless otherwise provided in the subsidiary holding company's charter, special meetings of the shareholders may be called by the board of directors or on the request of the holders of 10 percent or more of the shares entitled to vote at the meeting, or by such other persons as may be specified in the bylaws of the

Special meeting is a meeting called by shareholders to discuss specific matters stated in the notice of the meeting. It is a meeting of shareholders outside the usual annual general meeting.