- 3 - 1244 stock in the amount of $32,500. Petitioners reported Bis as the name of the corporation that issued the section 1244 stock. Although petitioners reported that the stock was purchased with cash, the number of shares issued to petitioners and the par value per each share were not listed. Section 61 provides that gross income means all income from whatever source derived, including interest income. Sec. 61(a)(4). Petitioner contends that although the bank accounts listed the names of both petitioners and their Social Security numbers, they were held by petitioners for the benefit of their children. The record does not show that petitioners were not the beneficial, as well as the legal, owners of these accounts. Thus any interest earned from these accounts belongs to petitioners and must be reported as interest income by petitioners. Sec. 61(a)(4). Section 165(g)(1) and (2)(A) generally provides that a taxpayer realizes a capital loss when stock that is a capital asset becomes worthless. Section 1244(a) provides a limited exception to this general rule in that it allows an individual taxpayer to treat a loss on "section 1244 stock" as an ordinary loss where it would otherwise be treated as a loss from the sale or exchange of a capital asset. The aggregate amount of the loss that may be treated as an ordinary loss under section 1244 cannotPage: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011