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John, taxpayer, owns a farm that he inherited from his uncle and has no intention of ever allowing it to leave the family. His inherited
John, taxpayer, owns a farm that he inherited from his uncle and has no intention of ever allowing it to leave the family. His inherited basis in the property is $500,000, but he decides to "sell" it to his brother for $400,000 and thereby, gain himself a $100,000 tax write-off. After several years, his brother "decides he no longer wants it" and sells it back to John for $300,000 gaining himself another $100,000 write-off!
why would IRS disallowe losses on sale to related parties. Why or why not.
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