"Chris Conley" <chris[at]gravitytank.com> wrote:

- quote -

Only the corporation would know if they qualify. The facts
you provided don't even come close to determining the
answer.

- quote -

Not really. They have no legal obligation. Moreover, if
you weren't an original shareholder at legal formation which
your post suggests, It's not 1244 stock to YOU.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"Chris Conley" <chris[at]gravitytank.com> wrote:

- quote -

Normally the corporate bylaws or charter will specifically
state the stock qualifies under §1244. To qualify as §1244
stock the corporation must be a small business corporation
(capital assets including what was received for the stock
are under $1M). Also, only stock that was originally issued
to the taxpayer qualifies as §1244 stock. So if the
corporation issued you the stock for your investment then it
may qualify, if you purchased some of the owners existing
stock it does not.

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I have purchased $14k in stock of a S-Corp of which I am now
the managing director.

If my employment terminates within the first year, I will
forfeit the stock for zero value as per my employement
agreement.

Can this stock be classified as section 1244?

Is there anything the company needs to do when they issue
the stock or when I surrender the stock upon termination to
qualify as section 1244?

Thanks for any responses...

Winston

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