In order to enter a Section 1244 Stock Sale (or exchange) you need to go to
the Investment Income section. This is found under the Federal tab and
Income & Expenses. Select “start” or “revisit” by “Stocks, Mutual
Funds, Bonds, Other”. From here your screens may be different if you
have already entered information into this section.
If you have not entered information in this
section the first question should be “Did you sell any investments in
2017?”. Select “Yes”. You will then be asked if you got a 1099-B.
Since this is the dissolution of your C Corporation I would say “No”
here. If it was reported on a 1099-B then select Yes.
At this point the questions should look similar whether this is your first time through this section or not.
When asked to choose the type of investment select “Stocks”.
Enter the information requested about the sale of the stock. The date sold would be the date of dissolution of the C Corp.
When asked “Did you buy this stock?” select “I
bought this stock”. While this is not a traditional type of purchase
you did invest money to gain the stock. You can also select “One” for
the number of times you purchased and enter your total basis in the
stock as the purchase price. If you select another acquisition method you will not receive the following question.
After you enter the purchase information you
should see a screen that says “Do any special situations apply to this
sale?”. Select “Small business stock”. See screen shot below.
The next question will ask what kind of stock. Select “Section 1244 stock”. See Screenshot below
Finally you will get to a screen that says “Tell
us about the stock sold”. (See screenshot below) You have to check everything on this page
(except “None of the above”) to qualify for Section 1244 treatment. If
any of these statements do not apply you should not check the box.
