Related person sale loss

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  • Premier
    Junior Member
    • Jan 2016
    • 2
    #1

    Related person sale loss

    I have a client who is looking to sell residential rental property to a related person in 2016. I understand that any loss is not deductible and any gain is taxed at ordinary tax rate vs capital gain rate. My questions is on which form(s) do I indicate that the sale is between related persons?
    Tags: nondeductible loss
    • mactoolsix
      Senior Member
      • Apr 2009
      • 544
      #2
      Form 4797 Part II

        Comment

        • taxea
          Senior Member
          • Nov 2005
          • 4292
          #3
          Originally posted by mactoolsix
          Form 4797 Part II
          Mac isn't that for a business sale.

          google: Sale of Residence - Real Estate Tax Tips - IRS.gov
          Don't believe the don't have to report the sale, if you don't the IRS will ask for documents. Report on Sch D and if a loss, back it out
          Believe nothing you have not personally researched and verified.

            Comment

            • taxmom34
              Senior Member
              • Nov 2008
              • 732
              #4
              selling residential RENTAL property, isn't rental property the sale of a business? I'm thinking you can't sell on an installment sale to a related party.

                Comment

                • mactoolsix
                  Senior Member
                  • Apr 2009
                  • 544
                  #5
                  Originally posted by taxea
                  Mac isn't that for a business sale.
                  Form 4797 is used for the sale of depreciable rental property. Since it is a related party transaction, the sale must be reported as normal income (no capital gain treatment) on Part II

                  TAXMOM - yes, you are correct, you cannot use an installment sale with related party transactions.

                  Mike

                    Comment

                    • taxea
                      Senior Member
                      • Nov 2005
                      • 4292
                      #6
                      Originally posted by mactoolsix
                      Form 4797 is used for the sale of depreciable rental property. Since it is a related party transaction, the sale must be reported as normal income (no capital gain treatment) on Part II

                      TAXMOM - yes, you are correct, you cannot use an installment sale with related party transactions.

                      Mike
                      Mike...my bad...I missed the "rental" part of the post. Must have read it before I had my coffee.
                      Believe nothing you have not personally researched and verified.

                        Comment

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