Video: Overview of Section 267

In this lesson, Nick Palazzolo, CPA, demystifies the complexities of Section 267 by diving into the specifics of related party transactions. Starting with the basics, he clarifies who qualifies as a related party, from immediate family members to entities with significant ownership connections. Nick walks you through the calculations for determining indirect ownership between entities and the implications this has on transactions. He sheds light on why losses are disallowed in transactions between related parties but gains are taxed, placing emphasis on the rationale behind these IRS rules. Nick also details the intricacies of basis rules, holding periods, and how these relate to gift tax rules. Ending with a look at the particulars of loans with imputed interest, Nick breaks down how the IRS treats below-market interest rates between related parties, ensuring every facet of Section 267 is made clear.