Only the original holder of the QSB stock, and not any transferee, is eligible to make this election. There is no annual or lifetime limit on the amount of gain or proceeds from the sale of QSB stock that is eligible. Section 1244 Section 1244 of the Code permits investors who have incurred a loss on their holdings of Section 1244 stock to deduct such loss as an ordinary loss against their ordinary income, rather than as a capital loss against their capital gains. The loss on Section 1244 stock can occur upon its sale or exchange, or in the event that the stock becomes worthless. Only the original purchaser of Section 1244 stock from the corporation is permitted to deduct a loss on Section 1244 stock as an ordinary loss.
Any excess loss sustained in such year remains as a capital loss.
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