OWNERSHIP & ENTITIES

Same-taxpayer principle

Also called: same taxpayer rule · same entity rule

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PLAIN-ENGLISH DEFINITION

Industry shorthand for the need to maintain appropriate taxpayer continuity between the relinquished and replacement sides of an exchange.

What it means in practice.

The phrase is a planning shorthand, not a standalone statutory label. Changes involving LLCs, partnerships, trusts or co-owners should be evaluated for federal tax ownership and reporting consequences.

Why it matters.

Entity restructuring immediately before or after an exchange is a frequent professional-review issue.

Additional notes.

The phrase is a planning shorthand, not a standalone statutory label. Changes involving LLCs, partnerships, trusts or co-owners should be evaluated for federal tax ownership and reporting consequences.

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