step_transaction_and_timing - RedSox Corporation to provide...

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Step Transaction or Timing may be the key factor RedSox Corporation sells an asset to an unrelated third party who subsequently resells the asset to RedSox’s wholly owned subsidiary Fenway Corporation. If these two transactions occur within the same month, the IRS is certain to collapse the two transactions into a direct sale from RedSox to Fenway and recast the transaction as a related party transaction. It would be up to
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Unformatted text preview: RedSox Corporation to provide evidence to the IRS which would rebut their position. If the first sale occurs three years before the second sale, the substantial length of time between the sales should make them immune from the step transaction doctrine. In general, transactions separated in time by more than 12 months are presumed to be independent. In other words, the initial transaction is “old and cold”....
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This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

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