
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1243]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                 Subchapter P--Capital Gains and Losses
 
     PART IV--SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
 
Sec. 1243. Loss of small business investment company

    In the case of a small business investment company operating under 
the Small Business Investment Act of 1958, if--
        (1) a loss is on stock received pursuant to the conversion 
    privilege of convertible debentures acquired pursuant to section 304 
    of the Small Business Investment Act of 1958, and
        (2) such loss would (but for this section) be a loss from the 
    sale or exchange of a capital asset,

then such loss shall be treated as an ordinary loss.

(Added Pub. L. 85-866, title I, Sec. 57(a), Sept. 2, 1958, 72 Stat. 
1645; amended Pub. L. 91-172, title IV, Sec. 433(b), Dec. 30, 1969, 83 
Stat. 624; Pub. L. 94-455, title XIX, Sec. 1901(b)(3)(F), Oct. 4, 1976, 
90 Stat. 1793.)

                       References in Text

    The Small Business Investment Act of 1958, referred to in text, is 
Pub. L. 85-699, Aug. 21, 1958, 72 Stat. 689, as amended, which is 
classified principally to chapter 14B (Sec. 661 et seq.) of Title 15, 
Commerce and Trade. Section 304 of the Small Business Investment Act of 
1958, is classified to section 684 of Title 15. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 661 of Title 15 and Tables.


                               Amendments

    1976--Pub. L. 94-455 substituted ``an ordinary loss'' for ``a loss 
from the sale or exchange of property which is not a capital asset''.
    1969--Par. (1). Pub. L. 91-172 substituted ``stock received pursuant 
to the conversion privilege of convertible debentures'' for 
``convertible debentures (including stock received pursuant to the 
conversion privilege)''.


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-455 applicable with respect to taxable years 
beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, 
set out as a note under section 2 of this title.


                    Effective Date of 1969 Amendment

    Amendment by Pub. L. 91-172 applicable to taxable years beginning 
after July 11, 1969, see section 433(d) of Pub. L. 91-172, set out as a 
note under section 582 of this title.


                             Effective Date

    Section applicable with respect to taxable years beginning after 
Sept. 2, 1958, see section 57(d) of Pub. L. 85-866, set out as an 
Effective Date of 1958 Amendment note under section 243 of this title.
