3.4 Transaction Between Partner & Controlled Partnership

1. Related Party Loss

1) Related party loss is disallowed (directly or indirectly over 50% of interest)
2) Constructive ownership rule

2. Related Party Gain

1) Ordinary income:
(1) Depreciable asset (2.3 Loss not recognized 2. Related Party Transaction) or
(2) Not capital assets in the hands of the transferee