What Is the Easiest Way for a Taxpayer Who Is

question 234

Essay

What is the easiest way for a taxpayer who is going to sell property that has declined in value to avoid the § 267 loss disallowance provision?

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Definitions:

Financial Basis

The underlying value or cost used for tax purposes, to calculate capital gain or loss upon the sale of an asset, including adjustments for improvements, depreciation, and costs of sale.

Pay Back

The process of returning or repaying borrowed funds, especially the principle amount of a loan.

Accounting Break-Even

The point at which total costs and total revenues are exactly equal, resulting in neither profit nor loss.

Net Income

The net income of a company once all costs and taxes are subtracted from its revenues.