Tax implication of off market transfer?

Need helps to sort out the tax implication of off-market share transfer. The owner of the shares wants to sell in losses for tax deduction and hope to buy back later at the same price to hold.

1. Could the seller, who sell in losses through the off-market share transfer, declares the losses for tax deduction?

(wli: I just got the answer, yes only if the price is as the market value!)

2. Could the seller sell the share at the price lower than the market price and declare the losses for tax deduction?

(wli: I just got the answer, no! it is wash sale.)

3. Could the seller buy the share back through the off-market share transfer at the price to sell?

(wli: ...yes if buy back at market value)

4. Are there any limitation of the minimum time period between the sale and buy-back of the same share through the off market transfer?

(wli: ...no!)

I just could not find answers specified for the above questions. Thanks in advance for any help from the experts.

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The tax impacts of off market transfer are as the followings:

1. The share price of the off market transfer must be the market value.
2. The market value is the market price at the date the off market transfer form. http://www.commsec.com.au/public/toolssupport/AustralianShares.aspx
3. It keeps the same tax liability and deduction as normal share transfer
4. The time period for share buyback after share sale through off market transfer has not clear requirement but if the period is too short it could be liable to wash sale.
5. Wash sale is not allowed, http://www.ato.gov.au/corporate/content.aspx?doc=/content/00110544.htm

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The market value is explained in the off market transfer form as below:

10. CONSIDERATION: The full amount paid in settlement of the transfer of securities. You may set your own consideration. For capital gains tax purposes however, if you are not dealing at “arms length” the consideration will be deemed at a fair market value for the date of purchase (i.e. for this transaction, not the original purchase), regardless of the actual consideration you decide to set. Closing, or last prices are quoted in the daily newspapers. (Please note: If you are unsure whether you are dealing at “arms length”, please seek independent financial advice). Page 2/15 of offMarketTransfer_GuideLines.pdf

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Arm’s length definition:
The description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other. It becomes important to determine if an agreement was freely entered into to show that the price, requirements, and other conditions were fair and real. Example: if a man sells property to his son the value set may not be the true value since it may not have been an "arm's length" transaction. http://legal-dictionary.thefreedictionary.com/arm's+length

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It seems that it has to be decided to hold the share or not with tax deduction benefit.

1. If want to hold, you can sell in off-market to your trustful people for tax deduction and let him/her hold and sell at your will.

2. If don’t want to hold any more, sell in the market.