Construction owners with multiple LLCs — this one’s important.

You can sell equipment to your spouse’s company at a loss…And lose the entire deduction.

No fraud. No penalties. Just gone.

It’s called Section 267 — the related-party rule.

If you sell assets at a loss to:• Your spouse• Your kids• A company you own more than 50% of• A partnership your family controls

That loss is disallowed.

And here’s the trap: ownership attribution.

You may think you own 40%.But if your spouse owns 20% and your kids own 10%?

The IRS says you own 70%.

Contractors get burned moving:• Equipment between LLCs• Real estate between family entities• Accrued management fees

Before transferring assets internally, run the related-party analysis.

Once the loss is disallowed — you don’t get it back.

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.