Something I thought may help small business or corporations.
Small business stock (also known as 1244 stock) is stock invested in a domestic corporation or ‘S’ corporation. The idea is you can incorporate a business and entice friends and family to join by guaranteeing them capital gains, or capital losses if stock is sold at a loss or the company goes under. There are stipulations which must be met in order for this section 1244 stock to be used. The deduction amount on an ordinary loss is 50,000 each year, or 100,000 on a joint return. Your corporation must not be worth more than 1million dollars including the 1244 stock you intend to sell. The stock must be newly issued (You cannot buy treasury stock.)and must be for money or property. During the last 5 years of business before the loss, 50% of the gross receipts must be from operations not “royalties, rents, dividends, interests, annuities, and sales or exchanges of stocks or securities.”
IRS Publication 550 http://www.irs.gov/pub/irs-pdf/p550.pdf pg 51