Under Internal Revenue Code §267, the concept of a “related party” encompasses a broad set of relationships, including but not limited to:
A person and members of their immediate or extended family, such as a spouse, siblings, parents, children, or further lineal descendants.
A grantor of a trust and any fiduciary administering that same trust, as well as the fiduciary and any beneficiaries thereof.
Multiple fiduciaries where the trusts they administer have the same grantor.
Executors of estates and the estate's beneficiaries (except in the limited case where a transfer satisfies a pecuniary bequest).
A fiduciary of a trust and any corporation in which either that trust or its grantor directly or indirectly holds more than half of the stock's value.
A corporation and any individual who, directly or through attribution, owns in excess of 50% of the corporation's stock value.
Two or more corporations where ownership places them within the same controlled group.
An S corporation and a C corporation with overlapping ownership exceeding 50% in value, or two S corporations under the same condition.
A corporation and a partnership, where the same individuals hold more than half of both the corporation's stock value and the partnership's capital or profit interests.
Partnerships that share common partners, where statutory ownership thresholds apply.
A tax-exempt organization (including educational or charitable entities) and any person who exerts direct or indirect control, whether personally or through their family.
A personal service corporation and its employee-owners, specifically in relation to the matching rule.
Please note that transfers of limited partnership interests can carry significant tax and legal consequences. We recommend seeking the advice of your legal and tax professionals before undertaking any such transfer.
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