If One Member Sells an Asset with a Realized Loss

question 37

Short Answer

If one member sells an asset with a realized loss to another member of an affiliated group, any loss on the transaction is not recognized at that time; such a deferral applies the ____________________ rule.

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Definitions:

Illegal

Forbidden by law or statute, violating legal statutes or rules.

Express Trust

A legal agreement created intentionally by a grantor, designating a trustee to manage assets for the benefit of beneficiaries.

Grantor

An individual or entity that transfers property rights to another person or entity.

Constructive Trusts

Legal arrangements treated by a court as if they are actual trusts, when someone has wrongfully obtained or withheld property that rightfully should belong to another.