What is 1244 Stock?
1244 stock is a classification on investments used when filing a capital loss on personal taxes with the Internal Revenue Service (IRS). Usually, there is a $3,000 US Dollars (USD) limit on losses that can be counted against personal income. With a 1244 stock, individuals can write off up to $50,000 USD as ordinary loss. For example, an individual shareholder Bob invests $100,000 USD in stock of Corporation A. Corporation A has a difficult year and its shares drop dramatically, so Bob sells his shares off for $40,000 USD, creating a loss of $60,000 USD. His additional investments are doing well, so he has $10,000 USD in capital gains from other investment sources. Usually, he would be able to claim $10,000 USD capital losses against his capital gains and an additional $3,000 USD of ordinary loss against his other regular W2 income. If the stock in Corporation A qualifies for 1244 status, he can now claim not only the $10,000 USD capital loss against his capital gains, but the additiona
