[LSNYC]

How are in laws not related parties? If I sell something to my in laws and file a joint return how are they not a related party? Page 62 of NINJA notes.

Thanks!

A - 61, 91!!
B - 78!
F - 76!!!
R - 71, 73, 74, 69, 77!!!!

Finally done!

This is my 2nd attempt at the exam, I had two parts passed (failed many) and I stupidly quit, big mistake. Now I'm back and with a vengeance!

[SeattleAccountant]

LSNYC, yeah, going over issues related to in-laws and this that's what i've got on them so far:

Depending on issue, in-laws can be close relatives as in qualifying relative for a dependency exemption if criteria met

and can be as if “total strangers” for purposes of related-party transactions.

bwt, I though that one does not file joint return with the inlaws, but rather, claim person/both of them for dependency exemption?!

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[LSNYC]

Thanks Seattle

I guess what I don't understand is my parent is a related party right? Then how if I file a joint return with my husband are his parents my inlaws not a related party. I am only taking about sales to related parties here if you have NINJA notes look at pages 61-62.

Thanks!

A - 61, 91!!
B - 78!
F - 76!!!
R - 71, 73, 74, 69, 77!!!!

Finally done!

This is my 2nd attempt at the exam, I had two parts passed (failed many) and I stupidly quit, big mistake. Now I'm back and with a vengeance!

[red3biggs]

My take, and maybe I am wrong.

Your in-laws do not become a permanent related party.

So long as you are married and your spouse is living, they are a related party through your wife.

But, if you divorce or your spouse passes, they would no longer be considered related parties.

AUD: 8/17/2012
REG: 4/29/2013
BEC: 7/8/2013
FAR: 1/16/2014

[jeff]

In-laws are not related parties.

From IRS:

Losses on sales or trades of property. You cannot deduct a loss on the sale or trade of property, other than a distribution in complete liquidation of a corporation, if the transaction is directly or indirectly between you and the following related parties.

Members of your family. This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.).

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[LSNYC]

Jeff – here is my confusion, If you file a joint return with your spouse and sold property to one of your parents, for tax purposes this is a related party to only one of you how is that possible? Maybe I am over thinking this….

A - 61, 91!!
B - 78!
F - 76!!!
R - 71, 73, 74, 69, 77!!!!

Finally done!

This is my 2nd attempt at the exam, I had two parts passed (failed many) and I stupidly quit, big mistake. Now I'm back and with a vengeance!

[jeff]

Well – this would be where it was a business-type transaction because you're deducting a loss.

For purposes of the exam, just run with it 🙂

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[Author]

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