# IRS: selling to a foreign sibling



## cescolar (May 31, 2013)

In the IRS rules for capital losses, they tell you that you cannot take a loss if you sell to a sibling.

I recently found out that, to determine if a company is a CFC, your sibling's shares are assigned to you, unless your sibling is not a US person (i.e. not a citizen or a US resident.)

Is there also the same exception for capital loses?
(It would make sense: when you sell at a loss to US siblings, if they later get a gain, the IRS would get its due. But not if the sibling is foreign.)


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## BBCWatcher (Dec 28, 2012)

I think the IRS is wary of transactions between related persons for valuation reasons. I don't see any exception for non-U.S. citizen relatives, so I think you're probably out of luck on that point. But maybe you could ask for a tax ruling?


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## cescolar (May 31, 2013)

How do the tax rulings (PLRs) work? Are they just for you to ask for a clarification of the law or for an exception, giving some special circumstances?

In my case, I would like to sell to my brother for the same price I paid. But at the same time I would incur a currency loss. So my brother is not giving me a special deal so I would get a loss...would a PLR address that?


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## Bevdeforges (Nov 16, 2007)

As I understand the process (and it has been a while), you submit the details of your situation to the IRS and ask for them to declare what rules they will or won't apply. Whatever they tell you applies only to your situation.
Cheers,
Bev


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