If a Loss from Sale or Exchange of Property Between

question 61

Multiple Choice

If a loss from sale or exchange of property between related parties is disallowed and the property is subsequently sold to an unrelated party,

• A)An amended return may be filed to claim the loss previously disallowed.
• B)The unrelated party may claim the loss previously disallowed.
• C)The disallowed loss may be used to offset gain on the subsequent sale.
• D)The disallowed loss may be used if there is a further loss on the subsequent sale.
• E)The disallowed loss is lost forever.

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Definitions:

Recessionary Period

A time characterized by economic decline across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Inflation

A general increase in prices and fall in the purchasing value of money.

Inventories

Producers’ stocks of finished and in-process goods.

Economic Fluctuations

Variations in the economic activity of a country over time, including periods of growth (expansions) and decline (recessions).