Bill Bronchick! Bulletproof Corp Question - Posted by Bert G

Posted by William Bronchick on March 12, 2000 at 11:02:15:

The Section 1244 allows you to take a loss of up to $50,000 if your stock becomes worthless (ie, your business bombs). Otherwise your loss is limited to a capital loss, which means carrying it forward. It has nothing to do with the S election.

(FYI, that happened to me once; I got stupid and though that I could make money in the restaurant business as easy as I could in real estate and ended up with a 1244 loss of almost $50k! I took it in one year, which was the plus side of it.)

Bill Bronchick! Bulletproof Corp Question - Posted by Bert G

Posted by Bert G on March 12, 2000 at 10:54:07:

Bill, I tried to post this on Legalwiz, but your server is still being a pest. Its about Bulletproof Corp and Sec 1244 stock.

My accountant called this morning asking if I’d filed the form 2553 to be an S corp. I told her I’m not an S, I’m C. “Then why do you have that resolution for Sec 1244 stock?”. Gee, I don’t know, I’ll have to read the book again.

OK, I read the book, now I’m a tad confused. The section on 1244 stock (Chapter Eight, “Shareholder Issues” Page 71, sec B) doesn’t contain the words “S corporation”. The previous section A. “The S Corporation election” doesn’t contain the words “small business”. Thus, I assumed them to be completely separate issues.

For this years taxes its pretty much a moot point, as I didn’t do any business in the corp in 1999, there was no income, a few expenses, and total assets of about $700.00 BUT I want to get the books in order just in case the IRS ever comes a’callin.

(I’ll cut the accountant some slack. She’s my best friend, just took the CPA exam, and is doing my taxes gratis to help pay off a loan. The only drawback is that she’s a Democrat, and might not understand capitalism.)

Bert G in ND

Love the last paragraph!(nt) - Posted by Andy in MI

Posted by Andy in MI on March 12, 2000 at 19:51:24: