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 Meeting Name: Special Meeting of the Board of Directors Corporation Name: [Name of Corporation] Meeting Purpose: Adoption of Stock Ownership Plan under Section 1244 of the Internal Revenue Code Meeting Type: Special Date: [Date of the Meeting] Time: [Time of the Meeting] Location: [Meeting Venue] Attendees: 1. [Name of Director 1] 2. [Name of Director 2] 3. [Name of Director 3] 4. [Name of Director 4] 5. [Name of Director 5] Agenda: 1. Call to Order: The meeting was called to order by [Name of Director]. 2. Roll Call: The attendees present were listed as mentioned above. 3. Approval of Agenda: The proposed agenda for the meeting was unanimously approved. 4. Adoption of Stock Ownership Plan under Section 1244: 4.1 Presentation and Discussion: [Name of Director/Presenter] gave a detailed presentation on the advantages, requirements, and tax benefits of adopting a Stock Ownership Plan under Section 1244 of the Internal Revenue Code. Keywords: Section 1244, Stock Ownership Plan, Internal Revenue Code, adoption, tax benefits. 4.2 Questions and Clarifications: The directors engaged in a discussion, seeking clarifications and asking questions related to the proposed plan. Keywords: Stock Ownership Plan, Section 1244, clarification, questions, discussion. 4.3 Resolution Proposal: A resolution was proposed by [Name of Director] to adopt the Stock Ownership Plan under Section 1244 of the Internal Revenue Code. Keywords: Resolution, proposal, Stock Ownership Plan, Section 1244, adoption. 4.4 Vote: A vote was taken, and the resolution to adopt the Stock Ownership Plan under Section 1244 of the Internal Revenue Code was unanimously approved. Keywords: Vote, approval, Stock Ownership Plan, Section 1244. 5. Adjournment: With no further business to discuss, the meeting was adjourned by [Name of Director]. Keywords: Adjournment, meeting conclusion. Types of Hawaii Minutes of Special Meeting of the Board of Directors to Adopt Stock Ownership Plan under Section 1244 of the Internal Revenue Code: — Initial Adoption of the Stock Ownership Plan — Amendments to the Stock Ownership Plan — Annual Meeting for Review of the Stock Ownership Plan — Dissolution and Cancellation of the Stock Ownership Plan Note: The above list is not exhaustive and may vary depending on the specific requirements of the corporation.
Hawaii 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
Under the current 2020 tax tables, a long-term capital gain that results from the sale of this Section 1244 stock will be taxed at the regular preferential rate of 15% for most individuals or 20% for high-income individuals with taxable income over $441,450. The 3.8% Net Investment Income Tax (NIIT) may also be due.
Form 4797, Sales of Business Property, is used to report an ordinary loss on the sale of Section 1244 stock or a loss resulting from the stock becoming worthless. Attach Form 4797 to Form 1040.
1244(b)). Any loss in excess of the limit is a capital loss, subject to the capital loss rules. Thus, if the potential loss exceeds the $50,000 (or $100,000) limit, the stock should be disposed of in more than one year to maximize the ordinary loss treatment.
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
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.
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...?
HW: How are gains from the sale of § 1244 stock treated? losses? The general rule is that shareholders receive capital gain or loss treatment upon the sale or exchange of stock. However, it is possible to receive an ordinary loss deduction if the loss is sustained on small business stock (A§ 1244 stock).
The Tax Benefit of Section 1244 Stock 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 in any tax year) is that they are subject to an annual deduction limit of only $3,000.