Related Parties – Installments

Today we hear from Barry in WI who is doing research. He says, “I am searching for the IRS definition concerning related parties and installment notes between related parties and any new cases concerning this issue.”

Dear Barry,

IRS has several definitions for related parties – depending on the issue.

In the case of installment sales, which may be different from installment notes, the definition is easy to find. Read the instructions to Form 6252 – Installment Sale Income.
http://www.irs.gov/pub/irs-pdf/f6252.pdf
On page 2, it defines related parties as :

For this purpose, a related party includes your spouse, child, grandchild, parent, brother, sister, or a related corporation, S corporation, partnership, estate, or trust. See section 453(f)(1) for more details.

Now all you need to do is research case law related to IRC 453(f)(1) .
http://www.legalbitstream.com shows 44 cases with this code section.

You should be able to find what you need there.

And remember, you can find answers to all kinds of questions about installment sales and all kinds of other tax issues, free. Where? Where else? At TaxMama.com

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