In any transaction that could result in a loss or deduction, the related-party rules under Sec. 267 must be considered. In today's complex financial landscape, the structure of deals is increasingly complicated and clients rely on their tax and financial advisors to ensure they receive the highest possible income tax deductions in financial transactions.Within this competitive climate and timelines to meet transactional deadlines, clients and advisors may not consider whether the taxpayers involved in the transaction could be considered related under the relationship definition clause of Internal Revenue Code (Code) Sec. 267. It's important to focus on the relationship between taxpayers to determine whether a related-party situation exists that could otherwise disallow a loss or a deduction.

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