Federal Tax

Related Party Transactions (Portfolio 564)

  • The Portfolio, Related Party Transactions, examines and analyzes the dual purposes of §267, a central-related party provision.


Bloomberg Tax Portfolio, Related Party Transactions, No. 564, examines and analyzes the dual purposes of §267.

First, as a definitional section, §267 establishes the degree of relationship that gives rise to the application of its operational provisions. The effect of identifying certain taxpayers as “related” may cause a transaction to obtain federal income tax consequences significantly different than a transaction consummated by parties that are not related. Because the core definition of “related parties,” as found in §267, is often cross-referenced by other sections throughout the Internal Revenue Code, an analysis of this definition is pivotal in determining the impact of other sections, as well.

Second, as an operational section, §267 defers certain deductions and denies certain losses incurred in related party transactions.

This Portfolio provides a detailed discussion of each of § 267’s definitional and operational rules. It also gathers, in one source, other provisions of the Internal Revenue Code that borrow the definition of related parties as provided for in §267 and analyzes their interrelation.

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Table of Contents

I. Introduction
II. Section 267
III. Section 707
IV. Section 108
V. Section 197
VI. Section 336
VII. Section 355(d)(7) and (8)
VIII. Limitation on Interest Deductions
IX. Installment Sales
X. Involuntary Conversions
XI. Like-Kind Exchanges
XII. Gain from Sale of Depreciable Property
XIII. Transfer of Intangible Property to Foreign Corporations

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George Koutouras
CEO and Founder
LumiNational LLC
Mark Tizabgar
Mark Tizabgar
Head of Global Tax
Saban Capital Group
James Carreon
Principal, M&A Tax
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