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26 U.S.C. § 1243 — Loss of small business investment company
Federal law — U.S. Code and appendices · legal_authorities
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.
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Stable record: federal_law:legal_authorities:record_usc_80e9c273d247fe4c071b265a
Source file: Laws/federal/codes/united-states-code/title-26/section-1243-loss-of-small-business-investment-company--6b83f099fd.md
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Source location: Title 26, Chapter 1, § 1243; chapter-001-normal-taxes-and-surtaxes.md
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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.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Securities** Notwithstanding sections 165(g)(1) and 166(e), subsections (a) and (b) of section 166 (relating to allowance of deduction for bad debts) shall apply in the case of a bank to a debt which is evidenced by a security as defined in section 165(g)(2)(C).
**(b) Worthless stock in affiliated bank** For purposes of section 165(g)(1), where the taxpayer is a bank and owns directly at least 80 percent of each class of stock of another bank, stock in such other bank shall not be treated as a capital asset.
**(c) Bond, etc., losses and gains of financial institutions**
(1) **General rule** — For purposes of this subtitle, in the case of a financial institution referred to in paragraph (2), the sale or exchange of a bond, debenture, note, or certificate or other evidence of indebtedness shall not be considered a sale or exchange of a capital asset. For purposes of the preceding sentence, any regular or residual interest in a REMIC shall be treated as an evidence of indebtedness.
(2) **Financial institutions to which paragraph (1) applies**
(A) *In general* — For purposes of paragraph (1), the financial institutions referred to in this paragraph are—
(i) any bank (and any corporation which would be a bank except for the fact it is a foreign corporation),
(ii) any financial institution referred to in section 591,
(iii) any small business investment company operating under the Small Business Investment Act of 1958, and
(iv) any business development corporation.
(B) *Business development corporation* — For purposes of subparagraph (A), the term “business development corporation” means a corporation which was created by or pursuant to an act of a State legislature for purposes of promoting, maintaining, and assisting the economy and indust
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 582
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of a corporation, there shall be allowed as a deduction an amount equal to the following percentages of the amount received as dividends from a domestic corporation which is subject to taxation under this chapter:
(1) 50 percent, in the case of dividends other than dividends described in paragraph (2) or (3);
(2) 100 percent, in the case of dividends received by a small business investment company operating under the Small Business Investment Act of 1958 ([15 U.S.C. 661](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section661&num=0&edition=prelim) and following); and
(3) 100 percent, in the case of qualifying dividends (as defined in subsection (b)(1)).
**(b) Qualifying dividends**
(1) **In general** — For purposes of this section, the term “qualifying dividend” means any dividend received by a corporation—
(A) if at the close of the day on which such dividend is received, such corporation is a member of the same affiliated group as the corporation distributing such dividend, and
(B) if such dividend is distributed out of the earnings and profits of a taxable year of the distributing corporation which ends after December 31, 1963, and on each day of which the distributing corporation and the corporation receiving the dividend were members of such affiliated group.
(2) **Affiliated group** — For purposes of this subsection:
(A) *In general* — The term “affiliated group” has the meaning given such term by section 1504(a), except that for such purposes sections 1504(b)(2) and 1504(c) shall not apply.
(B) *Group must be consistent in foreign tax treatment* — The requirements of paragraph (1)(A) shall not be treated as being met with respect to any dividend received by a corporation if, for any taxabl
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 243
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Function of investment companies** It shall be a function of each small business investment company to provide a source of equity capital for incorporated and unincorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration.
**(b) Conditions** Before any capital is provided to a small-business concern under this section—
(1) the company may require such concern to refinance any or all of its outstanding indebtedness so that the company is the only holder of any evidence of indebtedness of such concern; and
(2) except as provided in regulations issued by the Administration, such concern shall agree that it will not thereafter incur any indebtedness without first securing the approval of the company and giving the company the first opportunity to finance such indebtedness.
**(c) Repealed. Pub. L. 90–104, title II, § 206, Oct. 11, 1967, 81 Stat. 271**
**(d) Direct or cooperative provision of capital** Equity capital provided to incorporated small business concerns under this section may be provided directly or in cooperation with other investors, incorporated or unincorporated, through agreements to participate on an immediate basis.
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 684
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definition of surviving spouse**
(1) **In general** — For purposes of section 1, the term “surviving spouse” means a taxpayer—
(A) whose spouse died during either of his two taxable years immediately preceding the taxable year, and
(B) who maintains as his home a household which constitutes for the taxable year the principal place of abode (as a member of such household) of a dependent (i) who (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) is a son, stepson, daughter, or stepdaughter of the taxpayer, and (ii) with respect to whom the taxpayer is entitled to a deduction for the taxable year under section 151.
(2) **Limitations** — Notwithstanding paragraph (1), for purposes of section 1 a taxpayer shall not be considered to be a surviving spouse—
(A) if the taxpayer has remarried at any time before the close of the taxable year, or
(B) unless, for the taxpayer’s taxable year during which his spouse died, a joint return could have been made under the provisions of section 6013 (without regard to subsection (a)(3) thereof).
(3) **Special rule where deceased spouse was in missing status** — If an individual was in a missing status (within the meaning of section 6013(f)(3)) as a result of service in a combat zone (as determined for purposes of section 112) and if such individual remains in such status until the date referred to in subparagraph (A) or (B), then, for purposes of paragraph (1)(A), the date on which such individual died shall be treated as the earlier of the date determined under subparagraph (A) or the date determined under subparagraph (B):
(A) the date on which the determination is made under [section 556 of title 37](https://uscode.house.gov/view.xhtml?req=granuleid:
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 2
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Federal law — U.S. Code and appendices · legal_authorities
It is declared to be the policy of the Congress and the purpose of this chapter to improve and stimulate the national economy in general and the small-business segment thereof in particular by establishing a program to stimulate and supplement the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply: Provided, however, That this policy shall be carried out in such manner as to insure the maximum participation of private financing sources.
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 661
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Federal law — U.S. Code and appendices · legal_authorities
Page 2344
TITLE 26—INTERNAL REVENUE CODE
§ 1243
Editorial Notes
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,
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.
AMENDMENTS
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.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94–455 applicable with respect
to taxable years beginning after Dec. 31, 1976, see sec-
tion 1901(d) of Pub. L. 94–455, set out as a note under
section 2 of this title.
EFFECTIVE DATE
Section applicable with respect to taxable years be-
ginning after Sept. 2, 1958, see section 57(d) of Pub. L.
85–866, set out as an Effective Date of 1958 Amendment
note under section 243 of this title.
§ 1243. Loss of small business investment com-
pany
In the case of a small business investment
company operating under the Small Business In-
vestment Act of 1958, if—
(1) a loss is on stock received pursuant to
the conversion privilege of convertible deben-
tures 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.
(Added Pub. L. 85–866, title I, § 57(a), Sept. 2, 1958,
72 Stat. 1645; amended Pub. L. 91–172, title IV,
§ 433(b), Dec. 30, 1969, 83 Stat. 624; Pub. L. 94–455,
title XIX, § 1901(b)(3)(F), Oct. 4, 197
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 1243
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.