How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Dimitry K., Esq. Your Own Question
Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
Type Your Business Law Question Here...
Dimitry K., Esq. is online now
A new question is answered every 9 seconds

Can an S Corporation shareholder use section 1202 to avoid

Customer Question

Can an S Corporation shareholder use section 1202 to avoid taxation of gain upon disposition, related to 1244 stock
Submitted: 2 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 2 years ago.
Thank you for your question. Please permit me to assist you with your concerns.
To answer directly, upon review of both Section 1202 and 1244 stock, the sections appear to be somewhat unrelated as reporting. That is, if the stock is sold at a loss under 1244, the loss is reported by the shareholder, but that presumes that there is therefore no gain under 1202, as 1202 is related to actual gains against the stock rather than losses. A stock evaluated at $100,000 but sold at $50,000 has a $50,000 loss under 1244, there is no inherent gain unless the initial stock was gifted or included as a stock option for which the individual never invested anything directly.
Dimitry, Esq.