### Question
How does Income Taxes define preferred stock?


### Answer
Under *26 U.S.C. § 247*, **preferred stock** is defined as:

> stock issued before October 1, 1942, which during the whole of the taxable year (or the part of the taxable year after its issue) was stock the dividends in respect of which were cumulative, limited to the same amount, and payable in preference to the payment of dividends on other stock

#### Citation:
  - *26 U.S.C. § 247*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VIII-SPECIAL DEDUCTIONS FOR CORPORATIONS**

