Antonio and Francesca Pecora - Page 4

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          exceed $100,000 in the case of a husband and wife filing a joint            
          return.  Sec. 1244(b)(2).                                                   
               The term "section 1244 stock" generally means stock of a               
          qualifying domestic small business corporation that was issued              
          for money or other property (other than stock or securities).               
          Sec. 1244(c).  The Commissioner is empowered to prescribe                   
          regulations necessary to carry out the purposes of section 1244.            
          Sec. 1244(e).  Pursuant to that authority, the Commissioner                 
          issued regulations requiring a taxpayer to have records                     
          sufficient to establish that the taxpayer satisfies the                     
          requirements of section 1244 and is entitled to the loss claimed.           
          Sec. 1.1244(e)-1(b), Income Tax Regs.                                       
               In order to substantiate an ordinary loss deduction claimed            
          by its shareholders, a corporation should maintain records that             
          show the persons to whom the stock was issued, the date of                  
          issuance to these persons, and a description of the amount and              
          type of consideration received from each person.  Sec. 1.1244(e)-           
          1(a)(2), Income Tax Regs.  There are other requirements that we             
          need not detail here.  We have held that strict compliance with             
          the requirements of section 1244 and the regulations thereunder             
          is necessary to obtain the benefits of the section.  Mogab v.               
          Commissioner, 70 T.C. 208, 212 (1978); Gubbini v. Commissioner,             
          T.C. Memo. 1996-221.                                                        







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