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Sec. 267 was enacted to disallow certain losses and deductions on transactions between related taxpayers
Sec. 267(a) disallows two specific types of deductions: (1) a loss on the sale or exchange of property between related parties and (2) a deduction for a payment to a related party who has not included the item in income.
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Thank you. I told the client we could not deduct the loss, and he stated another accountant said it was deductible
Well now you have the section to quote
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