Drake Tax - Entering Qualified Small Business Stock (QSBS)

Enter gains on the sale of Qualified Small Business stock in the section designed for those sales on the 8949 screen, located on the Income tab in data entry of the return.

Section 1244 Small Business Stock Losses can be entered on the 4797 screen with property type of 44. Note that there are limitations to the amount that may be claimed as ordinary losses under Section 1244 and the taxpayer may be further limited in the amount of capital loss allowed on the return. See Publication 550 for more information.

1120-S/1065

In a business return, you may need to select a Property Type on the 8949 screen in some situations. This allows the information to be reported on Form 8949 and Schedule D as normal, however, the total gain or loss from the sale of these assets flows from Schedule D to Schedule K, line 11, and is not included in the amounts on Schedule K, lines 8 or 9a with any other amounts flowing from Schedule D, lines 7 or 15.

1. Used for QSB stock deferred under Section 1045. This selection may also apply to the sale or exchange of QSB stock with a Section 1202 Exclusion.

2. Non-depreciable personal property