James is a 50% partner in JL Partnership. James sells land at a loss of $20,000 to the partnership. Do you agree that James's loss involving the sale of the land to the partnership should be disallowed on his Form 1040? Why or why not?
Yes, the loss on the land sold to a partnership in which the seller has a 50% interest should be disallowed on his Form 1040.
First the transaction is not " At Arms ...
This solution is an opinion backed by tax regulations concerning a partners dealings with a partnership.