Answer the following statements true (T) or false (F)
1. Under the wash sale rule, if all of the sold shares are not repurchased within the relevant time period, a portion of the loss on the sale is allowed.
2. Losses on sales of property between a taxpayer and his/her siblings are disallowed.
3. Losses on the sale of property between a taxpayer and his/her more than 50-percent-owned corporation are disallowed.
4. If a loss is disallowed under Section 267, a gain on a subsequent sale of the property by the related purchaser may be offset by the previously unrecognized loss.
5. Brienne sells land to her brother, Abe, at a loss. A few years later, Abe sells the land to an unrelated party for a substantial gain. Brienne can recognize her realized loss on the land when Abe sells the land to an unrelated party.
1. TRUE
The portion of the loss relating to the shares not replaced will be allowed.
2. TRUE
Losses on sales between related parties are not allowed.
3. TRUE
Losses on sales between related parties are not allowed. A shareholder and his more than 50-percent-owned corporation are related parties.
4. TRUE
The original seller of the property in a related party sale will never recognize the loss, but if the purchaser later sells the property for a gain, the purchaser can offset the gain with the unrecognized loss.
5. FALSE
Brienne will never recognize the loss. Abe will be able to offset his gain by Brienne's loss.
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