Question

The ordinary loss treatment of Section 1244 losses is intended to: a. encourage investment in small...

The ordinary loss treatment of Section 1244 losses is intended to:
a. encourage investment in small businesses
b. assist farmers
c. encourage employment and production in the United States
d. reduce administrative complexity in the internal revenue code
e. prevent income shifting
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Answer #1

Answer : A) Encourage investment in small businesses

Explanation: Section 1244 is designed to encourage new investments in small buesinesses by allowing certain capital losses for treating as ordinary losses in course of business. ordinary losses are allowed fully to be deducted without any limit and without any offset with capital gains. thus it helps the new and small businesses to have lower effective tax rate for capital gains.

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