Final answer:
True, Losses from sales or exchanges of property between related parties are indeed disallowed as a measure to prevent tax avoidance and to maintain transactions at arm's length.
Step-by-step explanation:
It is true that losses are disallowed from sales or exchanges of property between related parties according to the Internal Revenue Code, specifically section 267. This disallowance rule is designed to prevent tax avoidance through sales or exchanges of property that are not conducted at arm's length. The Internal Revenue Service (IRS) seeks to ensure that parties cannot claim artificial losses for tax purposes when the transaction is between family members or entities that are controlled by the same group of individuals.