related party sale

KWF

Member

Join Date: Dec 2007

Posts: 61
#1

related party sale

12-18-2007, 01:46 PM

A trust with 8 beneficiaries (cousins) owns a parcel of land. The trust sells the land at a loss to one of the beneficiaries. After the sale the trust is terminated.
Would this loss be deductible at the trust level, and be proportionately distributed to the beneficiaries? Or would the loss be non-deductible to the trust due to related party rules, and instead transfer to the purchaser-beneficiary?
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BOB W

Senior Member

Join Date: Jun 2005

Posts: 4060
#2

12-18-2007, 02:29 PM

First you need to backup> Was an appraisal done to justify the sale at the sale price?????

If yes, then I would proceed as others may advise. If no, you have a problem, or should I say Trustee has a problem. Was a full disclosure to all benficaries done?

Last edited by BOB W; 12-18-2007, 03:25 PM.

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