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The theory of relativity is in the tax code

Posted on December 2, 2011 by David Conley in Estate Planning, For Business, For Individuals
0
Albert Einstein
Albert Einstein

Image via Wikipedia

This is not the theory discovered by Einstein, but the one that states that certain tax advantages may be disallowed if you sell an asset to someone (or a company) that the tax code calls  a “related party.”

Simply put, selling a capital asset at a loss to any of the following entities will cause the loss to be disallowed.

  • Children or grandchildren
  • Parents or grandparents
  • Brothers or Sisters
  • A company that is more than 50% controlled by you (directly or indirectly) 

Although there is no current loss allowed, there is still a tax benefit remaining. 

Clients can email us for more information.

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David Conley
David is a partner at Smith, Conley & Associates, PC. In addition to writing and tax consulting, he is active in the pro-life community serving as President of the Fayette County Right to Life chapter of Georgia Right to Life.
He is also a founding Board Member and Finance Director of the Fayette Pregnancy Resource Center and serves on the Board of the National Equal Rights Institute.
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capital gains, disallowed, related, related party, relatives

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