CHAPTER 1— NORMAL TAXES AND SURTAXES›Subchapter P— Capital Gains and Losses›PART IV— SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
§ 1243. Loss of small business investment company
26 U.S.C. Subtitle A — Income Taxes (Internal Revenue Code) · 2026 edition · updated 2026-10-03 · United States
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.
(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, 1976, 90 Stat. 1793.)
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