Arkansas 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 I. Introduction: The minutes of the special meeting of the Board of Directors of (Name of Corporation) held in Arkansas on [Date], called specifically to discuss and adopt a Stock Ownership Plan under Section 1244 of the Internal Revenue Code, are documented below. II. Meeting Call and Attendance: The meeting was called to order by [Name], the Chairperson of the Board of Directors, at [Time] on [Date], at the specified location in Arkansas. The following members of the Board of Directors were present: 1. [Name] 2. [Name] 3. [Name] 4. [Name] 5. [Name] 6. [Name] III. Purpose and Proposal: The Chairperson explained the purpose of the meeting, which was to discuss and consider adopting a Stock Ownership Plan in accordance with Section 1244 of the Internal Revenue Code. The plan aimed to provide incentives to key employees and shareholders, encouraging their long-term commitment and dedication to the success of the corporation. IV. Presentation and Explanation: The Board of Directors received a detailed presentation by [Name], a designated representative or consultant (if applicable), explaining the provisions, benefits, and regulatory aspects of the proposed Stock Ownership Plan under Section 1244 of the Internal Revenue Code. The presentation outlined how the plan will be structured and implemented, including eligibility criteria, stock allocations, vesting schedules, and tax implications. V. Discussion and Deliberation: The Board engaged in a thorough discussion, addressing various aspects and considerations related to the proposed Stock Ownership Plan. Topics of discussion included the potential impact on corporate finances, future valuation of stock options, legal compliance, employee retention, and tax advantages for designated shareholders. VI. Resolution and Adoption: After extensive deliberation, [Name] proposed a resolution to adopt the Stock Ownership Plan under Section 1244 of the Internal Revenue Code. The proposed resolution was duly seconded by [Name], followed by a unanimous vote in favor of adopting the plan. The resolution was documented and signed by the Chairperson, Secretary, and attending Board members. VII. Adjournment: With no further business to discuss, the meeting was adjourned by the Chairperson at [Time]. Types of Arkansas 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: 1. Initial Adoption: Minutes documenting the first-ever adoption of the Stock Ownership Plan by the Board of Directors. 2. Amendment or Modification Adoption: Minutes describing any subsequent changes or modifications to the existing Stock Ownership Plan, duly adopted by the Board of Directors. 3. Annual Review Adoption: Minutes pertaining to the annual review of the Stock Ownership Plan adopted by the Board of Directors, ensuring its alignment with organizational goals and regulatory compliance. Note: The specific types of minutes may vary based on the internal procedures and unique requirements of the corporation.
Arkansas 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
To qualify under Section 1244, these five requirements must be adhered to:The stock must be acquired in exchange for cash or property contributed to the corporation.The corporation must issue the stock directly to the investors.The corporation must be an actual, operating company.More items...?
1244 loss is the property's adjusted basis reduced by liabilities to which the property is subject or that the corporation assumed. However, if the property's fair market value (FMV) is less than its adjusted basis when it is transferred to the corporation, any Sec.
In order to qualify as §1244 stock, the stock must be issued, and the consideration paid by the shareholder must consist of money or other property, not services. Stock and other securities are not "other property" for this purpose.
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...
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
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...
The maximum aggregate loss that may be treated by a taxpayer as ordinary loss for a taxable year with respect to an issuing corporation's Section 1244 stock is $50,000, or $100,000 for a husband and wife filing a joint return. Any loss in excess of the maximum allowable loss must be treated as a capital loss.
Corporations, trusts, estates and trustees in bankruptcy are not eligible to claim a Section 1244 loss. A Section 1244 loss can be claimed only by an individual or partnership to whom the stock was issued and who has continuously held the stock until it is sold or is determined to be worthless.